Now that the microchip shortage has come to an end, we’re finally seeing new car inventories increasing. In December 2022, U.S. new car inventory topped 1.8 million for the first time since May 2021 — but Market Days Supply rose to 59, a 65% increase from the previous December. It’s clear that given the economic uncertainty that continues today, many American consumers are keeping their wallets closed.
So, what do these conditions mean for you and your dealership inventory management approach? You’re going to need a sure strategy to start turning more of your new car inventory, growing your profit and maintaining your OEM allocations. We’ve pulled together five best practices to help keep the profitability of your new car inventory improving.
- Build a Smarter Inventory
The first step to successful dealership inventory management is stocking the vehicles that car shoppers in your market actually want. It’s important to know what’s selling, and how quickly in your market, and how those vehicles compare to what you’ve already got in your new car inventory. If the OEM can’t give you the exact vehicles you want for your lot, consider making trades with other dealers.
Conquest™, vAuto’s solution for new car inventory management and pricing, can help. Conquest uses the industry’s most powerful real-time market data to give you the best competitive insights, along with a view of what your market is looking for right now — down to color, trim and equipment — which takes the guesswork out of building your inventory. Conquest also makes it easy to get specific types of vehicles from other dealers. An inventory that’s tailored for your market’s demand will help lure in car shoppers, even in today’s uncertain economic conditions.
- Keep Your New Car Inventory Pricing Competitive
Of course, even if your inventory attracts the attention of car shoppers, they’ll only consider purchasing from you if you offer the right price. You’ll need to check real-time new car inventory pricing data for your in-brand and off-brand competition and price your vehicles accordingly. Keep in mind that the era of pricing at or above MSRP is closing, so you need to be more mindful than ever of how your prices compare to those of your competitors.
Conquest provides all that information on one screen, making it easy to price your vehicles competitively. You can even create automatic pricing strategies based on criteria such as vehicle color, trim or equipment — and set up pricing to change over time. This way, your new car inventory pricing doesn’t just start competitive — it stays competitive.
- Carefully Manage Your Rebates and Incentives
With new car inventories increasing but not moving, manufacturers might introduce new incentives to help things along. It’ll be more important than ever to stay on top of all the details so you don’t lose out on sales opportunities. Advertising outdated or incompatible rebates could be extremely costly.
Conquest can help by creating and verifying rebate stacks for every vehicle — and building each rebate and incentive into your price to make your listings more attractive to online shoppers.
- Merchandise Your Vehicles to Sell
When today’s car shoppers look online, they’re not just browsing and deselecting vehicles from their consideration. They’re actually using VDPs to make their final decision about which vehicle they’re going to buy. As a dealer, you need to make sure the information in your listings is accurate and consistent across all third-party sites, especially regarding vehicle details, rebates, pricing and images.
Conquest makes it easy to create listings with professional photos and unique descriptions. You can also use the solution to instantaneously update your listings across all third-party sites with ensured accuracy.
- Develop an Exit Strategy for Cars That Don’t Sell
Even with new car inventory improving, and even if you follow the best practices above, you might still have trouble moving cars. Don’t be afraid to get creative! You might consider putting them at the front of your showroom or making them a loss leader.
Conquest can help you pinpoint which vehicles might be slow to sell. On day one, you’ll know which vehicle colors and equipment combinations will be least popular in your market. With this information, you can start preparing your exit strategy for problematic vehicles sooner so the factory doesn’t count aging units against you.
New car inventories are increasing, and that’s always a good thing — you can’t make sales if you have nothing to sell. Some dealers will use economic uncertainty as an excuse to allow their sales volumes to dip. And others will do everything they can to keep their new car inventory improving so they can make every possible sale — and increase their profitability as a result. Which dealer will you be?
To see how Conquest can help you take the best approach to dealership inventory management, request a demo today.