In 2017, we saw a string of annual gains start to level off. But as we look ahead to 2018, we at vAuto see opportunities to help dealers get ahead of the competition.
In this edition of Live Market View, I’d like to share the following key strategies to help you fuel growth for your new and used car business.
New Car Operations
Jonathan Smoke, Cox Automotive’s chief economist, believes we’ll see 16.7 million new cars retailed in 2018 because of a better mix and a tighter supply of new vehicle inventory.
Although the automotive market appears to be leveling off, we’re expecting a strong year for new car success. OEMs are finally realizing that production adjustments and stocking reductions are necessary to better align supply and demand for SUVs and trucks.
Used Car Operations
Cox Automotive expects dealers to retail 500,000 more vehicles this year than they did last year. Expect greater volatility in the used car side of your business — dealers will compete more aggressively for used car sales to make up for softer volumes in new car sales.
The Key to Your Success: Market Days Supply
Challenging market conditions, along with the ongoing margin compression we see in new and used car sales, will require you to master inventory management fundamentals.
The key to your retailing success comes from the market itself and from the unique supply and demand of each vehicle. vAuto founder Dale Pollak asserts that if he were managing new and used vehicle operations, the metric he would rely on most is Market Days Supply. With the insight this metric provides, you can make well-informed stocking, pricing, merchandising and marketing decisions.
For more information on how to use our insights to your advantage, watch the Q1 2018 edition of Live Market View here. I hope you gain insights from this video to help improve your dealership’s bottom line.