{"id":1940,"date":"2021-09-30T15:48:09","date_gmt":"2021-09-30T20:48:09","guid":{"rendered":"http:\/\/efgintelligence.com\/dealershipcorridor\/?p=1940"},"modified":"2021-12-03T14:00:51","modified_gmt":"2021-12-03T20:00:51","slug":"preparing-for-a-different-kind-of-sales-season","status":"publish","type":"post","link":"https:\/\/efgintelligence.com\/dealershipcorridor\/preparing-for-a-different-kind-of-sales-season\/","title":{"rendered":"Preparing for a Different Kind of Sales Season"},"content":{"rendered":"

It\u2019s officially fall which brings football, cooler temperatures, and 2022 vehicle models. We can predict that at least two of those things are happening this year. New vehicle production challenges continue to linger. Chip shortages, supply chain disruptions and factory shutdowns<\/strong> still plague our need for new inventory.<\/p>\n

According to Cox Automotive, only 1.2 million new vehicles were ready to roll onto lots as of July 19th, compared with the average inventory of 3 million. In August, dealers reported just under 1 million new cars on lots, 72 percent lower than August 2019.<\/strong> The major manufacturers have projected production reductions well into the fall, making the new inventory forecast even gloomier.<\/p>\n

Regardless of inventory challenges, dealer profit margins continue to stay healthy. While light vehicle sales fell nearly 18 percent<\/strong> in August compared with a year ago, the average sales price hit a record $41,000<\/strong>, according to J.D. Power. Improving economic indicators and the semblance of a return to \u2018normal\u2019 has made consumers more willing to pay more for the vehicle they really want as opposed to settling for the vehicle they can find.<\/p>\n

While consumer demand bodes well for dealers, you will need to approach the autumn sales season a little differently. Consider these options to keep your profit margins healthy.<\/p>\n

Reservation Education<\/h3>\n

One of the biggest trends for 2021 has been the reservation model. Dealers are selling not just what\u2019s on their lot, but also what\u2019s in their pipeline. However for this model to truly work, consumers really need to understand the process.<\/strong> For example, when a customer reserves a vehicle, they often must pay their down payment at the time of reservation. At this time, they may be thinking that the current manufacturer incentives will still apply when the vehicle is delivered, weeks, or even months later. However, this is not always the case. While some manufacturers may \u201clock in\u201d their current incentives at the time of reservation, others do not, meaning that the incentives could change drastically or disappear altogether, resulting in significant changes to the vehicle\u2019s price.<\/p>\n

While this can potentially be very frustrating, dealers can use this as an opportunity to create ongoing communication<\/strong> with their customers to educate them on not only the reservation process, but also the finance process. At EFG Companies, we recommend implementing a sales funnel around orders for delivery, where sales team members reach out to the customer by their preferred method of contact at the following touch points:<\/strong><\/p>\n