Dealer Insights - May/June 2012 - Don’t Let Unwanted Stock Get the Best of Your Store

Published: May 1, 2012
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Which new cars sell quickly in your market depends on your customers’ demographics and various vehicles’ popularity at the moment. To avoid letting slow-moving vehicles have a negative impact on your dealership, you need to keep your eye on the prize.

HAPPY CUSTOMERS MATTER

Begin at the beginning: Take steps to get the vehicles you want from your manufacturer instead of units that will tie up your working capital and accrue interest as you await a sale.

The truth is that more-desirable inventory often goes to dealerships with high customer satisfaction index (CSI) scores. Runners-up must make do with a less desirable model mix. Thus, maintaining high CSI scores can go at least part of the way toward avoiding the problem of unwanted stock.

LOCATION COUNTS

Sometimes geography is the issue. What may be a slow seller in your territory could be a hot item elsewhere. For instance, imagine a convertible that arrives in the middle of a New England winter. Parked next to a snowbank, it may not sell until summer. But it might find a buyer more quickly in sunny California.

Consider working with another dealer in a different part of the country. You never know — a one-time arrangement to rid yourself of an unwanted delivery could grow into a long-term, mutually beneficial relationship.

Or you could deal directly with customers in other locations. To this end, the Internet has become key. Many websites have evolved from individual auction forums to outlets for professional retailers.

THE FACTORY MAY HAVE THE ANSWER

Another solution for unwanted deliveries may come from the factory itself. Take advantage of any manufacturer programs to use an undesirable vehicle rather than trying to immediately sell it. In some cases, assigning it as a service loaner, rental vehicle, driver education car or the like might lessen your problem.

Interestingly, some models that sell slowly when new are much more popular when used. Extracting some revenue or service from the vehicle before selling it as a used car, truck or van could help cut your losses.

You may even be able to use the vehicle as a showroom traffic builder. Some so-called “halo” vehicles, which are most often sporty and expensive models built to create a favorable image for other models in the manufacturer’s lineup, often sell slowly.
Still, many potential customers may be genuinely interested in the vehicle, if only for the uniqueness of its design. Taking advantage of the attention it draws until a paying customer shows up can justify the cost of keeping it around.

NO CRYSTAL BALL

A dealership doesn’t always know which models will have quick turn times and which won’t. Sometimes, for example, big excitement about a new model fizzles out once the novelty wears off. But if you know your “audience,” stay current with area trends and are inventive, you may rarely have reason to return stock or watch a unit age.

Dealer Insights - May/June 2012 Issue