How Will Dealerships Keep Up With the Sudden Car Demand?

How Will Dealerships Keep Up With the Sudden Car Demand?

Car demand is at an all-time high with the world coming out of the COVID-19 pandemic. Are dealerships going to be able to keep up?

Dealers depend on the supply chain of vehicles to have inventory to sell. Across the country, many dealers have gone from having as many as 100 vehicles in their lot down to 20 or fewer. This is causing major concerns.

What Can Dealers Do?

Some dealerships are concerned with the lack of vehicles in the supply chain and the most they can do is continue to shout loudly to try and be at the head of the line when vehicles do come off the assembly line. Unfortunately, as the chip shortage continues to slow things down, there are only a few things that dealers can do to control the narrative and bring sales to their locations.

The Inventory of Used Cars has Increased

Many dealers have begun to fill their locations with more used vehicles than ever before. Popular ways to do this are with “we buy” slogans that encourage customers to bring their cars in and receive cash on the spot for the vehicle. Some dealers have also begun to buy higher numbers of models at auctions than ever before to put cars on their lot and continue the sales process.

New Models Are Being Sold Before Built

Tesla has a reputation for requiring customers to fork out some money upfront to secure a spot for a vehicle before its built. Some automakers are working with their dealership chain to create programs that mimic this process. Even though some customers may have to wait three to six months for the vehicle they want to drive, the high car demand has created an environment of taking a number and putting a little money down now to be in line for the vehicle.

Using pre-payment/reservation programs has aided some dealerships in keeping the books straight with the knowledge that sales are coming as soon as the cars, trucks, SUVs, and minivans arrive at their location. Unfortunately, this can be a bit of a double-edged sword. The vehicles are being sold before they arrive, which is good, but the lot is not being filled back to its capacity.

Dealers are Pushing Services Harder than Before

Visits to the service center of a dealership are a cornerstone of that business and how they create more income than simply selling vehicles. Many dealers are updating their marketing with the services they offer to entice customers to make their regular appointments and keep their cars running right. This appeals to the frugal among us who do not wish to pay the high prices associated with the current vehicle shortages.

Car demand is high and pockets have gotten deeper than before the pandemic. Dealers are working to solve the vehicle shortage as best they can, but dealers are on the end of the supply chain and depend on the rest of this system to work so they can have vehicles to sell.

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