Navigating Inventory Shortages

Download Full PDF Playbook Here: Lean Inventory Playbook

Dealerships are facing significant inventory shortages due to the effects of the Covid-19 pandemic. Many manufacturers halted production or shut down completely, but the demand for consumer vehicles never stopped. Unfortunately, the automotive industry will not start seeing some relief from the chip shortage for at least 2 years. In the meantime, here are some things you can do to try and combat the effects of the shortages.

Campaigns

Allocate more money to your used car advertising budget

It’s not uncommon now for dealerships to have more used cars than new ones. Use that to your advantage and change your advertising strategy towards focusing on more pre-owned vehicle campaigns. You should target shoppers that are more likely to buy used and/or pre-certified. While buying new is ideal for many shoppers, Pre-certified is the next best option. It offers the guarantee that the vehicle being purchased has been inspected and cleared and has a warranty that will give consumers peace of mind.

“We want to buy your car” campaign

This is a great way to add vehicles to your inventory while also bringing in more foot traffic to your dealership. Make sure you are advertising everywhere how a seller can get in touch with you either by phone, email, website, or social media and with whom. This will ensure that the seller has the easiest path for selling you their car and giving them a good experience. It is all about the consumer experience and a good experience is likely to bring them back.

Lease opportunities

Review leases that are coming to an end. With their leases ending they will need to find a replacement vehicle. Given the lack of inventory many customers may choose to purchase the vehicle that they have been leasing. Even if they choose not to purchase it, they will hand back the car to the dealership and add to the used inventory.

The automotive industry has been severely negatively impacted due to the Pandemic. The inventory shortages will not see any alleviation until about 2023. Given these unusual circumstances dealership need to adjust and adapt. They need to change their marketing and sales strategies and stretch the inventory that they do have.

Lean Inventory Playbook.” Dealer.com US, Cox Automotive Inc., 3 Aug. 2021, https://www.dealer.com/content/guide/lean-inventory-playbook/.