Are we currently in a ‘Goldilocks’ scenario? The market is neither too hot, nor too cold, but just right?
The trade press has been saying that used car prices are falling, but we’re not seeing this just yet. Even if there is a reduction in demand, the supply of used cars is still tight which gives no reason to drop prices – especially for cheaper vehicles. There’s also the added bonus in that service work is strong due to people holding onto their vehicles longer than usual.
There’s no sign that the chip shortage will ease any time soon. This has created an interesting dynamic in that manufacturers are focusing on their high margin vehicles, which means that longer lead times are affecting the ‘commodity’ run-arounds. This is another reason why the used car market is holding up; if you need a run-around second car, it’s difficult to find one at a reasonable price.
If you feel that the market is going against you, then definitely check your pricing against your peers.
However, the chances are it won’t be your prices, but your sales process, that needs looking at.
The trade has focused on lead management systems taking leads from form fills. What they have not integrated is telephone leads. As the telephone represents approximately 60% of all your leads, this is a vital channel to manage properly. We can empirically show that the average dealer does not record 50% of their telephone leads on their lead management systems. Improve this metric and you will not be feeling a lack of demand.
Headline Autotrader figures
- 2021 stock, MoM 55.4% increase, YoY 61.8% decrease
- 2020 stock MoM 5.6% increase, YoY 26.5% decrease
- Total market MoM 0.3% decrease, YoY 4.0% decrease
Top 5 brands by market share of 2021 stock
- Audi 10.5%
- BMW 10.1%
- VW 9.8%
- Ford 6.3%
- Mercedes 6.0%
It’s amazing to think that on 7 May 2002 Mediahawk was born, and we’ve been giving insight to the automotive sector for 20 years. Many thanks to all of our amazing clients and suppliers who have made this a great and fun journey. I’m looking forward to working with you for another 20 years!