Growing in a Supply Constrained Market
The Automotive Advisor Team Industry Article
Everything we hear is that the new car supply is back up again with volumes up 50% over last year and counting. What we often forget is we shut the country down in 2020, 2021, and part of 2022 which also shut down vehicle production. That inventory is our 2 to 4-year-old sweet spot used car market that never happened. As you can see we will be paying for that abrupt halt now and will for some time. It's important to build efficient processes and new ways of thinking while utilizing partners who have proven experience in these markets to help you grow and thrive when others pull back from uncertainty and fear.
Remember, adapting to a supply-constrained industry requires flexibility, agility, and proactive decision-making. Continuously monitor the market and adjust your strategies to stay ahead of the competition. Below are some strategies that we can use to grow market share in a supply-constrained industry:
1. Increase production efficiency: One way to grow market share in a supply-constrained industry is to increase production efficiency. This can be achieved by investing in new technology, streamlining processes, and optimizing inventory management. Another way is to bring in outside counsel who can help you define key performance indications that improve efficiencies while also taking advantage of the softer market opportunities.
2. Expand offerings: Another way to grow market share is to expand product offerings. This can be done by introducing new products or services that complement existing offerings or by entering new markets. For example, looking at your current retail model and finding areas of untapped opportunity in the acquisition, retail, and disposal ath will bring in new customers and new inventory that grows volume and ultimately overall profit.
3. Build strong relationships: Building strong relationships with suppliers can help businesses secure a steady supply in a supply-constrained industry. This can be achieved in automotive retail by building a relationship in the community as a brand to trust, by building regional alliances with auction personnel to get the best chance at inventory when it comes available, by finding new sources of fresh inventory from creative operational enhancements like a Quick Lube, or Car Wash or an Appraisal Lane on site. All can bring in new customers and new inventory to your dealership.
4. Focus on customer service: Providing exceptional customer service can help businesses differentiate themselves from competitors and attract new customers. This can be achieved by offering personalized service, responding quickly to customer inquiries, and providing after-sales support. Today's digital age had provided many tools to help enhance your customer's vehicle ownership experience with frequent interaction that show you care and are there when they need you. Other opportunities like online service scheduling and customer pick up and drop off have proven to grow dealers' service revenue, customer base, and opportunities for fresh inventory.
5. Invest in marketing and advertising: Investing in marketing and advertising can help businesses increase brand awareness and attract new customers. This can be achieved by using targeted advertising, social media marketing, and content marketing. Unfortunately, during slow times, many operators pull back and begin cutting expenses that do more harm than good. Remember what Henry Ford say about advertising? "Stopping advertising to save money is like stopping your watch to save time". We agree,
The Automotive Advisor Team was created for times such as these. Even during pandemic times of unequaled profitability, during the downturns dealers gave back those pandemic profits by the millions. What the market presents is always full of opportunity. Unfotrualty it is almost often described as doom and gloom. We like the way Walt thought about it.  " I heard there is going to be a recession. I decide not to participate." - Walt Disney. As my good friend David Long likes to say, we make our own Economy. We couldn’t agree more.
John Ellis
The Automotive Advisor Team
info@theautomotiveadvisorteam.com