It’s always amazing to me to examine two similar-sized, same brand dealerships just down the road from one another who are experiencing VERY different success with their operations.
One of the things I love about having access to a software tool that allows visibility into 22k dealerships’ inventory, sales, and pricing, is that there’s really nowhere to hide.
I also love the fact that on a daily basis I get to speak with dealers about how they’re performing vs. their local competition. Sometimes the results are favorable, and sometimes not. But in all cases, we can come away with specific strategies to help them get a competitive edge.
I was on the phone today with a very large domestic-brand franchised dealer, and we were looking at the composition and performance of their inventory and sales vs. a large same-brand franchised dealership just 10 miles away. What makes this particular case even more interesting is that the competing store is owned by one of the top 10 dealer groups.
A picture (or three in this case) really is worth a thousand words, so here’s what we were looking at (discretion dictates that I have masked the identities of these two dealerships – if you want to learn more, just contact me directly).
1. First, it was clear that our dealership (“Dealer A”) was managing their used car inventory very aggressively, with more than half in the 0-15 day bucket, and a total of 80% of their used inventory less than 30 days aging on their lot. The competing dealership (“Dealer B”) was asleep at the wheel, with 57% of their inventory over 90 days aging! Their used vehicle inventory profile looked something more like a domestic brand’s new car inventory profile!
2. Second, it was clear that part of the reason that our dealer (Dealer A) was moving their inventory so quickly and efficiently was that they are stocking FAR more attractive used cars on their lot. Dealer B had 79% of their vehicles in the highest Days Supply bucket (meaning that these were not vehicles that meet local consumer demand in their local market).
3. Finally, we looked at used vehicle pricing and found that Dealer A has a far more disciplined and methodical pricing approach to their used car inventory. Dealer B’s used car pricing was all over the map, and had many of their aged units still in the 110%+ Price to Market bucket!
Same brand, same location, and same size lot. Which dealer would you rather be?
I really do love my job. I get to spend time every day reviewing the performance of progressively-minded dealers who want to find competitive edges to increase performance in their local markets. It’s thrilling for me to be able to bring to market a software tool that translates a vast amount of data (7M individual vehicle VINs per day) into intelligence software that helps dealers improve their operations and profit.
If it’s of interest to our subscribers, I’ll start sharing more of these cases as I come across them.