Understanding the auto industry and trends in 2022-23 to increase dealership profitability

Tracking the automotive market and key trends in 2022-23 could help you gain an edge over other players in the auto retail industry and influence your dealership profitability in a positive way.
Before we dive deeper into the three key strategies to improve your dealership profitability, let us look at the consumer and automotive industry trends that may impact your dealership’s bottom line. To emphasize, it is critical to watch your consumers’ behavior and the auto industry’s inclination before planning a strategic move in anticipation of growing profits.

Three critical consumer behavior metrics to watch as your plan for growth in 2022

1. Future Vehicle Intentions

The pandemic has a low impact on consumers’ intentions to buy a new vehicle. 69% of consumers in the U.S, 3% more than the previous year, have not altered their timeline for purchasing a new vehicle, and 14% intend to acquire a vehicle to avoid public transportation.

trend shows impact of COVID on next vehicle purchase
Source: Deloitte Automotive Consumer Report

2. Preferred way of buying a vehicle

The COVID accelerated the digital buying options as more and more dealers offered virtual purchasing alternatives. Despite that option, the most preferred way of buying a vehicle remains in-person in the U.S. 75% of consumers would prefer an in-person experience to buy their next car.


Source: Deloitte Automotive Consumer Report

The main reason for purchasing a vehicle through a virtual process is the ease of use and convenience. 25% of consumers consider buying their next car online because of ease of use and 39% because of convenience in virtual buying.

Source: Deloitte Automotive Consumer Report

 

3. Inclination towards the personal vehicle

Personal vehicles are a high preference for consumers in the U.S. market. To point out, 76% of respondents said they are inclined to use private vehicles as a mode of mobility, the highest among all the other surveyed regions.

Source: Deloitte Automotive Consumer Report

Translate the consumer insights into strategies to improve dealership profitability

1. Adopt creative ways to optimize your inventory

Supply chain irregularities and the pandemic did not impact the consumers’ intention to buy a vehicle. As a matter of fact, growth in new car sales is driven by pent-up demand in 2022 as consumers appetite for vehicles continues to grow. Therefore, the dealership needs creative strategies to acquire used cars to meet the demands.

Opportunity in service drive: Fewer vehicles are going through auction; those that do are selling at record-breaking prices. Where is good used inventory? Not to mention, checking your service drive might help. Here is why:

– The average dealer sees 300-400 used vehicles in their service drive each month.

– You know your customers and the service history of their vehicle.

– Your service customers may be considering and not realize the premium value of their vehicle

Are you offering your customers buy-bids and appraisals? Your guaranteed price may be just the nudge they need to cash in or pre-order something new from you.

Make an offer your customers cannot refuse: Do we need to say consumers love instant cash offers and appraisals? Offering an appraisal and a buy bid on cars that come to your service drive will accelerate your buying opportunities. It creates a win-win for you and your customers.

2. Get in front of your shoppers first with advanced AI tools

Personal vehicles are of high preference to consumers in the U.S. Furthermore, approximately 86% of car shoppers conduct online research before visiting a local dealership, as per research from Adtaxi. These statistics show that consumers are more curious than ever, and they are fulfilling their curiosity by conducting online research before they ever set their foot in a dealership. Hence, it presents an excellent opportunity for dealers to influence potential buyers before they go to competitors.

Advanced marketing tools are your best friend: Technology and advanced marketing tools could provide deeper insights into your potential customers. For instance, A.I. powered tools can help you see:

  • The active shoppers in your market right now
  • Details of buyers- name, contact, motivation to buy
  • Make and models they are shopping for
  • The number of days in they have been in the market, shopping behavior, and intensity

Get a free demo to up your marketing game: We can help you get a demo of the new A.I.-powered tool to excel in the crucial areas of marketing.

Get access to:

– Rich data from about 90% of connected US devices

– Information coming from appx 250 million protentional shoppers

– Omni channel marketing

– Audience identification and reach within 24 hour of their entering the market