The automotive retail industry experiences various ebbs and flows. Responding to these changes quickly and effectively can either shift profits in your favor or encumber your business. You need information, and fast, to stay ahead of your competition and seize additional profits when they become available.
That’s where we come in.
ReconVelocity is more than reconditioning software. When you analyze your dealership’s data and compare that information to changes in the market, you have the opportunity to expand gross in bold new ways.
Here are some areas where ReconVelocity could help you earn more money and fast!
1. Automotive Industry
ReconVelocity provides automated daily updates on all open safety recalls. Depending on the recall, it may benefit your ADR to move affected vehicles to the appropriate department for correction ASAP.
Here’s a good example:
You have a dozen vehicles affected by the same recall.
With ReconVelocity you isolate and investigate your average time in that specific step. After correcting one vehicle you learn that the recall requires two days in one step. This allows you to compare forecasts and adjust your recon accordingly.
Rather than over-encumber one department and cause costly bottlenecks, you now know that you should temporarily shift your workflow in order to minimize ADR. Acting quickly to implement a short-term change such as this could be the difference between tens of thousands of dollars.
2. Consumer Trends
You need to understand how your consumers prioritize spending if you want to continually raise your bottom line.
In some cases, consumers won’t be spending. This affects your inventory and holding costs in big ways.
For instance, in May 2019, unsold vehicles hit a ten year high. Automakers and dealers had an estimated 4, 120, 900 unsold vehicles on hand, or a 78-day supply, according to the Automotive News Data Center. The 78-day supply was the highest number for what is traditionally the start of the summer selling season since it reached 85 days in 2009.
Suddenly, your holding costs have increased. Fortunately, with ReconVelocity, you know the exact size of your inventory. You can easily calculate how much profit you are losing due to reduced sales and higher holding costs. Take that money (the increased cost of holding) and deduct it from your acquisition fund. This will both prevent loss and balance your inventory with consumer spending.
Trade has big implications for business, especially in the automotive retail sector. We’re sure everyone is familiar with President Trump’s potential 25% trade tariff on all auto and auto-part imports. Though it is not in effect, auto retailers need to prepare their businesses just in case.
A survey conducted by Cox Automotive reveals that the nation’s auto dealers expect higher prices and lower sales of new vehicles if the tariffs were to take place. This is vital information for used car dealerships. The silver lining is that with reduced new car sales, consumers will shift to used-car showrooms.
So, what should you do?
To maximize profits, invest in expanding your inventory. With a higher inventory turnover, your holding costs will reduce. This, however, will also impact your recon estimates, overages and underages. With more spending on expanding inventory, your recon department may become slightly overburdened. With ReconVelocity, you can accurately asses ADR and calculate your true recon cost to ensure a healthy spending balance between acquisition, recon, and turnover.
ReconVelocity is not only designed to connect your entire team for a streamlined workflow. It is also designed to connect you with your industry so you can remain ahead of your competition and more profitable than ever before.
If you’re ready to maximize profits and optimize your dealership, request a FREE ReconVelocity demo today at email@example.com.