Evidence of auto sales slowing down due to the Coronavirus is starting to appear in forecasts. Analysts are predicting 2020 auto sales for the U.S. could drop as much as 20%.
As the virus spreads, however, its negative impact will be felt in the auto industry, said Jeff Schuster, LMC president of global vehicle forecasts. Volatility will remain with us until there is evidence of containment globally, and the lasting effect could spill into 2021.
Dealerships are already aware of needing to manage resources and mitigate margin compression. Now dealers will also need to focus on improving operational efficiency, reducing expenses and increasing online sales performance. The projected sales reductions mean dealers must identify ways to boost their online sales and consolidate expenses.
Here are four areas of dealership operations to review for cost reduction opportunities:
Consolidate Software Expense
How much are you paying for software services? The average franchise dealer spends $3,800 per month just on inventory management software.* Every dealership needs to effectively source, manage, price and merchandise their inventory but Dealerslink customers pay much less for better software services and support. Dealerslink offers more features, deeper data sets, and the best customer service in the industry for a third of the cost.
*IE: Provision $1,800, Conquest $1,500, Stockwave $500, average contract price per month.
Slash Auction Fees and Recon Costs
The Dealerslink Marketplace gives dealers access to over 50,000 clean, retail-ready vehicles available for sale without auction fees. Weld County Buick GMC saves over $360,000 a year in auction fees and recon costs alone by sourcing clean inventory through the Dealerslink Marketplace. How much could your dealership save per year on lane fees and recon? Try out this free Auction Fee Calculator.
Reduce Floorplan Expense
What do large nation-wide dealer groups like CarMax or AutoNation have in common? They pool combined inventory to offer a larger selection of vehicles to their customers. With over $1 billion of retail-ready vehicles, Dealerslink allows dealers of any size to expand the available inventory they can present to their customers without increasing flooring line expenses.
Reduce Transport Fees and Wholesale Losses
Why take your aged units off your lot and ship them to an auction when you can simultaneously present them for wholesale and retail directly from your lot? The Dealerslink Marketplace allows you to reach thousands of buyers without auction fees or transport costs. Again, Weld County Buick GMC saves over $54,000 a year just in transportation costs by selling directly to other Dealerslink dealers.
These recommended processes are not simply meant to be one-time budget cuts but are smart moves that will continue to pay back dividends to the dealership over the long haul.
If you’re interested in learning more or would like a price quote please call for a product demo today (844) 340-2522.