new year's resolution for your new car department

New Year’s Resolutions for your New Car Department

J a n u a r y 5 t h , 2 0 1 7

Brian Finkelmeyer | vAuto | Director of Product and Business Development for Conquest | brian.finkelmeyer@vAuto.com

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Interesting Mix of Variables for 2017

Sedan Recession – imbalance of inventory vs. demand

Record levels of Incentive Spending

Record levels of Inventory

Low Interest rates and Fuel Prices

Most Analysts projecting a slight sales decline for 2017

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“The manufactures have

changed the game, saying

to retailers, You can’t make

money selling new cars”

Mike Jackson, AutoNation CEO

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Stair Step

Programs

Additional Production

Capacity

Pricing Transparency

3 Key Drivers of Margin Compression

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3 New Car Resolutions for 2017

Precise Inventory

Management

Create Customer

Trust with

Transparency

Efficient

Marketing

Inventory Management

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How can we manage our inventories more efficiently?

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Smarter Ordering and Dealer Trades

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Be careful about what you order!

2,900 unique combinations in

Dealer inventory

1850 combinations have one or

zero sales in the past 90 days

65% chance of getting it wrong!

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Retail 90 Sales

Days Supply

Days to Sell

Ordering Desirability

Weighted

33.3%Weighted

33.3%

Weighted

33.3%

Scoring System to Rank Orderable

Combinations

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Vehicle Ordering AnalysisTRIM Exterior Interior Sales Rank Days Supply Rank Days to Sell Rank Desirability2.5S Gray Black 1 22 2 22.5SR Black Sport 2 25 7 52.5SR Gray Sport 3 17 7 32.5S Black Black 4 23 3 42.5SR White Sport 5 34 9 72.5S Silver Black 6 38 16 102.5SR Blue Sport 7 15 1 12.5SV Gray Black 8 38 33 142.5S White Black 9 31 9 92.5S Red Black 10 29 9 7

2.5SV Black Black 11 51 40 232.5SR Silver Sport 12 55 24 18

2.5S Blue Black 13 27 4 62.5SR Red Sport 14 40 19 132.5S White Black 15 52 20 162.5SV White Black 16 62 36 272.5SL White Beige 17 66 50 372.5SV Silver Black 18 67 54 392.5SL Gray Black 19 77 45 412.5SL Black Black 20 87 50 51

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Clear Visibility to Challenges and Opportunities

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Assessment of Price vs. Age and Market

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Automation of Pricing Rules

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Impact of having an Aging Policy

0-75 76-120 121-180 181+

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Polling Question

What is your biggest New Vehicle Inventory Challenge:

1. Understanding how to price your new vehicles to market

2. Ability to obtain the “Right” vehicles from your manufacture

3. Aged Inventory Management

4. Handling Dealer Trades

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Customer Experience

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“We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.”

Jeff Bezos, Amazon CEO

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What does today’s

new car customer

want?

Speed and Transparency

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Customers Prefer Your Website vs.

Your $20M Facility!

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Provide

Buying Tools

“The More You Tell, The More You Sell”

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Re-think BDC Departments

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Win Customers with Speed

Marketing

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Polling Question #2

How do you currently allocate your monthly marketing budget? (% should

add up to 100%)

Digital/Online

TV

Radio

Print/Direct Mail

Other

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Customers are only visiting

1.6 Dealerships

The game is being

Won and Lost

ONLINE!

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Two Key Marketing Challenges

Budget Allocation

Execution

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Are We Allocating $$’s Correctly?

25%

Budget

75%

Budget

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Where Should I be Investing?

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Improving Digital

Marketing Execution

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$7500 Per Monthwith Autotrader

$5500 Per Monthwith Cars.com

180% less likely to click on MSRP Vehicles!!

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Vehicle Descriptions

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Listings Management

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Resolutions are never easy to keep….

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Measure What You Manage

Key Performance Indicator Target

New Vehicle Inventory Turn 6+

Showroom Closing Ratio 65%+

Advertising Expense Per Vehicle $200-$300

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Accountability Tracker

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3 New Car Resolutions for 2017

Precise Inventory

Management

Create Customer

Trust with

Transparency

More Efficient

Marketing

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