I’ve had two dealers this week mention a certain large volume Buick GMC store (to remain nameless), both expressing disbelief about how this store can possibly be stocking and selling so many new vehicles.
The dealer in question has nearly 3K new vehicles in stock, and their competitors can’t figure out how they can possibly be pushing such a large volume of GM product and still be making money.
Amazingly, this particular dealer has almost 3K new vehicles in stock (combination of Buick and GMC brands), and their trailing 90 days new car sales were 1,599 at an average 66.3 days to sell. This puts them in the range of the average Honda (71 days supply) and Toyota dealer (61 days supply), not your typical GMC or Buick store (as a point of reference, according to the latest Automotive News data, Buick new car inventory is averaging 182 days supply, while GMC new car inventory is averaging 97 days supply).
I decided to take deeper look at this specific dealer to see if we could learn anything from their philosophy around stocking new cars. Check out the table attached.
I separated their inventory into two groups. Those units highlighted in green are where they’ve chosen to “over index” their lot (or stock more than the average dealer in their region). Those units in orange are where they’ve decided to “under-index” (or stock less than the average in their region).
The results show that they’ve got a sound strategy behind their new car stocking decisions. The vehicles they’re over-indexing have an average Days Supply of 99 days, and the cars they are under-indexing have an average Day Supply of 132 days.
We can also see that this Buick GMC store’s average Days Supply of 120 is less than half the region’s (at 241 Days Supply).
I can’t be sure if this dealer has a special relationship with the OEM to get a better mix of vehicles than the average dealership in the region (this may be the case, given the volume that they’re pushing out), but it’s apparently that they’ve really got their new car stocking optimized for their local market.
The press has recently commented on the challenges General Motors is having in particular with their new car inventories sitting on dealer lots. It’s clear that this one large volume Buick GMC store is doing a pretty smart job of stocking the right cars to meet local market demand.