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The Road to New Car Reinvention N o v e m b e r 1 6 t h , 2 0 1 6
Brian Finkelmeyer | vAuto | Director of Product and Business Development for Conquest | [email protected]
Moderator: Lori Dearman, Executive Webinar Producer Sponsored by: vAuto
New Car Reinvention: A Roadmap for Improved Efficiency and Profitability
Brian Finkelmeyer Director of Business Development
vAuto
Who’s In the Audience? A diverse audience of professionals registered across the country.
Everything looks good on the surface
33% of Dealers reported losing money in New Vehicle Operations in 2015
Stair Step Programs
Additional Production Capacity
Pricing Transparency
3 Key Drivers of Margin Compression
Increasing Pressure on Fixed and F&I
Poll Question 1: You’re all likely setting your forecasts for 2017, what kind of volume increase are you expecting to see next year at your dealership? • Down vs. 2016 • Flat-2% • 3%-5% • 6%-9% • 10% or more
3 Big Opportunities for Increased Efficiency
Inventory Customer Marketing
Inventory Management
What is your New Car Turn?
5.9
4.2
3.3
2.4
0
1
2
3
4
5
6
7
Annual Turn
Inventory Turn Disparity
$1.5M Gross
$600K Gross
Evaluate Your Inventory Turn
How can we manage our inventories more efficiently?
Smarter Ordering
Be careful about what you order!
2,900 unique combinations in Dealer inventory
1850 combinations have one or
zero sales in the past 90 days
65% chance of getting it wrong!
Retail 90 Sales
Days Supply
Days to Sell
Ordering Desirability
Weighted33.3%
Weighted33.3%
Weighted33.3%
Scoring System to Rank Orderable Combinations
Vehicle Ordering Analysis TRIM Exterior Interior Sales Rank Days Supply Rank Days to Sell Rank Desirability
2.5S Gray Black 1 22 2 22.5SR Black Sport 2 25 7 52.5SR Gray Sport 3 17 7 32.5S Black Black 4 23 3 4
2.5SR White Sport 5 34 9 72.5S Silver Black 6 38 16 10
2.5SR Blue Sport 7 15 1 12.5SV Gray Black 8 38 33 142.5S White Black 9 31 9 92.5S Red Black 10 29 9 7
2.5SV Black Black 11 51 40 232.5SR Silver Sport 12 55 24 18
2.5S Blue Black 13 27 4 62.5SR Red Sport 14 40 19 132.5S White Black 15 52 20 16
2.5SV White Black 16 62 36 272.5SL White Beige 17 66 50 372.5SV Silver Black 18 67 54 392.5SL Gray Black 19 77 45 412.5SL Black Black 20 87 50 51
Clear Visibility to Challenges and Opportunities
142 248
11 13
Adjusting Price with Age
Tie Pay Plans to Inventory Turn More floor plan income
Less ordering errors
More efficient lot management
10% Improvement in Inventory Turn
+$1,000,000 + Floor Plan + Ad Credits + Doc + Factory Bonuses
Dealer A 2016 2017
Inventory 200 200
Annual Turn 4 4.4
Sales 800 880
Gross $10,000,000 $11,000,00 Assume $1250 per car Gross including F&I
Customer Experience
“We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.”
What does today’s new car customer want?
Speed and Transparency
Customers Prefer Your Website vs. Your $20M Facility!
Provide Buying Tools
“The More You Tell, The More You Sell”
Re-think BDC Departments
Win Customers with Speed
Poll Question 2: What is the average amount of time it takes for customers to complete new vehicle purchases at your dealership? • < 1 hour • 1-2 hours • 2-3 hours • 3-4 hours • 4+ hours
Marketing
Customers are only visiting 1.6 Dealerships
The game is being Won and Lost ONLINE!
Two Key Marketing Challenges
Budget Allocation Execution
Are We Allocating $$’s Correctly?
25% Budget
75% Budget
Where Should I be Investing?
Improving Digital Marketing Execution
$7500 Per Month with Autotrader
$5500 Per Month with Cars.com
180% less likely to click on MSRP Vehicles!!
Vehicle Descriptions
Listings Management
Reinvention is never easy….
Measure What You Manage
Key Performance Indicator Target
New Vehicle Inventory Turn 6+
Showroom Closing Ratio 70%+
Advertising Expense Per Vehicle $200-$300
Next Steps - vAuto New Car Inventory Opportunity Analysis
Moderator: Lori Dearman, Executive Webinar Producer Sponsored by: vAuto
ASK THE EXPERT
Brian Finkelmeyer | vAuto | Director of Product and Business Development for Conquest | [email protected]
Brian Finkelmeyer Director of Business Development
vAuto
New Car Reinvention: A Roadmap for Improved Efficiency and Profitability
The Road to New Car Reinvention
Brian Finkelmeyer | vAuto | Director of Product and Business Development for Conquest | [email protected]
N o v e m b e r 1 6 t h , 2 0 1 6
