When you work in Car Dealerships you sometimes wonder where this came from?
What would compel seemingly intelligent Dealer Principals, and college educated General Managers to focus efforts on a 30-day sales cycles? After all, isn’t this a real business with long term planning and forecasting taking place. Well, at some dealerships it most certainly is. At others it’s more reactionary and many do live life based on a predetermined and mandated 30-day turn cycle. Dealer’s typically have just 48-hrs. from sale date to RDR (Retail Delivery Report) the cars to inside the factory dashboard.
Depending on the OEM, factories hammer the franchisee’s for monthly information, and final sales forecast. The factory is trying to plan for production, allocation, and delivery schedules so this information if needed. Everything is all about how many we can get out the door this month. It’s not that way in a traditional business environment where we plan, budget, and coordinate staff on a quarterly basis. Automobile companies are just not starting to understand what the “buyers” and supporters of their brands really want. OEM’s are discovering social media in a big way, some much better than others. A recent study was completed by non other than J.D. Power & Associates.
Positive Automotive Social Media Experience Impacts Purchase Decisions across All Generations
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Major corporations function on quarterly budgets. Here we are at the end of September, it’s the very last day and I’m positive car dealer’s nationwide are scrambling to get the most possible cars out the door. It it because it’s the last of Q32014? No, probably not, just the normal end of the month torture OEM’s are laying down on suffering Car Dealers.
I have been trying to figure out how to get prospects in the door between the 1st and the 15th so dealerships can better forecast, but so far can’t make people buy when I want them too. This is a age old problem us marketing types will always face. Why it that consumers are now in charge? What happened to the auto industry? Who decided that the actual manufacturers “Invoice” would be posted openly across the internet? Only the car industry is this way. Some will say, auto dealers did it too themselves, but that’s just not true. Most dealerships are great places to work, have honest and friendly staff, and just don’t care about cheating buyers. This holds true for Franchised, dealerships, USED only stores, Buy Here/Pay Here, etc. There are tons of industries that consumers will occasionally get lied too. It’s usually the sales staff and not a reflection of the overall dealership.
The idea that it car dealers are required to live by a 30 day sales cycle, be subjected to poor treatment from the factories, and have to manage “invoice” pricing on NEW is frightening. We did not ever address (maybe in dept in a future post) about the factories approaching dealerships to say, “either you spend millions to update you facilities to our exact standards, or risk losing all you’ve built the past 50-years” That seems wrong, but the factories are determined that they must look good……….you can’t be selling cars out of this old run down dealership attitude. The reality is that most older dealerships whom operate old style facilities are making money in spite of giving away most all new cars at invoice. Then here comes the manufacturer threatening termination of licensing agreements if the long time dealer wishes to opt-out and stay in older, probably paid for buildings and remain profitable. I can see the factories point regarding not being into having run down facilities across the county, but these stores do very little in the way of increasing revenue for car dealers. A remodel may be more cost effective and prevent the dealerships from such high capital expenditures that will not change 2015 sales forecast. What manufacturers could honestly believe that sales will spike for dealers who build multi-million dollar stores across America? I mean, the final products are appealing to the eye, but that very same buyer is going to visit the online store first. It makes little difference to consumers if the selling dealer has a new store or not. This has everything to do with an “image” the OEM’s
are trying to maintain. These are huge, thankless corporations who do not care about the hard-working dealerships from coast to coast. You would think they might care about profitability of
a franchisee, but in actuality they could care less who sell their cars. It doesn’t matter that it’s your store or the next franchisee down the street. To them, your a replaceable dealership
who better pony up some cash to make them look good or else.
So the next time your shopping for a cars online and trying to determine why your local dealer with old buildings may be asking slightly (a few hundred bucks) more, it could be because the brand your about to purchase is asking this local dealer to spend millions on a new facilities.