Discover the top car inventory management strategies for 2024 in this insightful interview with Chris Wyndham of LeadVenture (https://www.leadventure.com/). Learn how to navigate high inventory costs and leverage digital tools to optimize your dealership's performance. We’ll cover key principles to enhance your digital storefront, improve customer engagement, and manage costs effectively.

Key Topics:

• Effective car inventory management tips
• Impact of interest rates on car sales
• Leveraging digital marketing for car dealerships
• Maximizing exposure with high-quality photos and videos
• Utilizing AI for SEO-friendly vehicle descriptions

Join us as we explore innovative tactics to thrive in today’s competitive market. Whether you're dealing with aged inventory or looking to improve your online presence, these strategies will help you stay ahead. Subscribe for more expert tips on car sales and dealership management!



In this episode of the DrivingSales Defining Leadership Podcast, host Bart Wilson sits down with Steve Roessler, Chief Evangelist Officer at DriveCentric, to explore the evolving landscape of leadership in automotive dealerships. Steve shares his expert insights on how effective dealership management strategies and innovative CRM solutions are transforming the automotive industry. 

Listeners will gain valuable knowledge on:

• The role of technology in enhancing dealership operations
• Best practices for human capital management
• How to implement successful CRM systems
• Leadership tips to drive team performance and customer satisfaction

Whether you're a department manager, owner, or general manager, this episode provides actionable advice to help you stay ahead in the competitive automotive market. Tune in to learn from one of the industry's leading voices!

Welcome to the future of automotive dealership management with our latest episode of the "Driving Sales Defining Leadership Podcast," titled "How to Create Sales Manager Scorecards". Join our expert hosts, Bart Wilson, Craig Wilson, and J.D. Mixon, as they explore the dynamic role of managerial scorecards in enhancing dealership operations and leadership quality. This episode delves into the critical question of creating scorecards for new or used car sales managers to drive performance.

It goes without saying that Generative AI has revolutionized the way businesses operate across various industries, and automotive is no exception. This groundbreaking technology is redefining the future of automotive dealerships by enhancing customer interactions, optimizing employee efficiency, and boosting overall profitability. Generative AI in Automotive is expanding daily so you don't want to get left behind. 

Derek Simonds of Numa breaks down where AI is today, where we're going, and how to stay out of trouble.

In the fast-paced world of automotive retail, achieving harmony between sales, service, and brand management is crucial for success. With Automotive Communication Solutions at its core, these experts are pioneering the path towards a streamlined operational model that elevates both customer satisfaction and dealership performance. Discover how a Unified Dealership Management process can transform your business, enhancing Dealership Operational Efficiency every step of the way.

Listen while Eric Glass and Jeff dePascale of CallRevu help us unify our dealerships:

In a recent conversation with Jasen Rice, CEO/Owner of Lotpop, he gave us an update on the current state of the used car market and how new car inventories and seasonality are going to impact used vehicles in the coming months.

How is the used car market?

Well, you know, the tax season, we're in that middle of that part where it's starting to pick up, it's gotten busy. I do think we're at the tail end of it.

We turned out shopper activity. We look at Google Trends, people looking for used cars, and activity, and we always see either a February or March peak in that shopper index, and then it starts dropping off. What we've noticed off of those trending metrics is that we've hit that tipping point, I think, and then it typically goes down about 20% on their metrics between now and the middle of April.

Once that happens, you know, the thing is dealers right now are really busy, so they don't feel it yet. The customers who are done shopping might be still acquiring the vehicles. That's going to happen between, you know, now and the next couple of weeks, and dealerships usually don't react until it gets painful.

It will take about another 30 minutes for the smoke to clear in the tax season, which will put us right about the middle of April, because you think about it, April 15th is the deadline, right? Anybody that's waiting until the last minute to file probably owes money. I know that's typically what I do. I'm not going to file right away and write a check. I'm going to delay that as soon as I can, so dealers will start feeling it by mid-April and rolling into May. But they're doing pretty strong right now.

Google Trends and the Shopper Index

Now, that's basically kind of the shopper index again, and when I look at Google Trends, they do it on a scale of 0 to 100. And so, and it depends on the timeframe you look.

If you look right now, let's say at the last year, the peak of that shopper index has probably hit over the last, about last week, so that would be at a hundred on the Google Shopper Trends. Then by mid-April, it'll drop down to about 80, so that's about the 20% drop. What we'll see is about a, anywhere from about a 10 to 18% drop in volume though with that.

So as the shopper count goes down, the volume will follow. Now, the Google Trends, this isn't like Google tracking, you know, shoppers. What I'm looking at in Google Trends, and if you go to google.com/trends, you can type in any word, fishing, and see if that's trending up or down because it's springtime. You could type in whatever, Taylor Swift and Travis Kelce, whatever.

But if you type in used cars, so basically how many people go into Google, typing in used cars, that's the trending metric that I'm looking at. And it goes verbatim with our dealer's two-week volume. We track dealers on used car inventory management. We want a dealer to sell a hundred percent of their inventory every month. What we look at is what's going on in the last two weeks, and then the goal would be to sell 50% of your inventory in a two-week window. And we track those metrics, right?

And so as the shopper count goes up seasonally, the two-week sales volume goes up. And then as the shop count goes down, the volume goes down with it. Again, we've hit the peak and usually, that volume follows about a week or two after. So as the shopper count goes up a week or two later, the dealer's volume goes up. As the shopper count starting to go down, we're in that second week right now, that's where we'll start seeing that volume go down.

Anywhere probably I could say 10 to 20%, but more accurately probably 12 to 18%, we'll see that volume start going down because right now they're selling well above their 50% sale rate. A lot of our dealers were hitting 62%, on average was a 62% sale rate. This means that if they had 100, on average, our dealers had 100 in stock, they're selling 124, 125 of that 100. We will see that drop about 12%, but also that's in about a two-week window. We'll see that 62 go down to 50, and then we'll see that 50 drop down to 43. That 43%, again, you times that by two, that means out of 100, now you're going to be selling 86. We'll start seeing that in about the next 30 days.

How strong is used car pricing?

That's what that people say, at least what I've seen in articles when people say strong is the average price.  The average price went from 38 grand to 42 grand, or the average price on used went from 18 grand to 22 grand.

Now does that mean it's strong? Now that's, yeah, it's a higher dollar car. So it's a higher-dollar car. Now strong meaning price to market, like, hey, where are my cars leaving the market?

Right now, I mean, I was just looking at a dealer that's priced at a little over 100% market or 103% of the market, meaning he's 3% above the average, and he's selling 65% in two weeks or 130% a month. He's able right now to ask for a premium, at least in his market, to ask for a premium and still keep the volume going.

That's all going to change here in the next couple of weeks. So it depends on what you mean is a premium. Is it because it's a higher dollar or can I ask for a higher percentage of market? And this is where a lot of dealerships, again, this 30 to 45-day window is where a lot of dealerships are going to miss the boat.

What I mean by that is they're having a strong February, and March. They're going to have to go replace this inventory, so when they go to the auction to replace the cars, they're willing to step up because they're short and they want to keep the momentum, and so we're going to have what I call a false positive. What I mean by that is it will be positive in the fact that wholesale values will still be strong, again, over the next three to four weeks, because as dealers are selling this volume, they're going to go to the auction, they're going to step up. That's a premium at the lane, so it makes it look like the market's still at a premium.

But as things start slowing down over the next two weeks, the volume is going to go down. They can't sell anymore. They're going to have a hard time selling at 100% of market in three weeks from now. They're going to have to start selling at 95, 98% of the market, meaning two to five percent below market to keep that inventory moving. They're going to go to the auction, and pay a premium over the next two weeks to keep the pipeline full.

The problem is in about two to three weeks, where they got to sell it and what they paid for it isn’t going to match. So the false positive is, it's a positive, looks like things are strong, but it's a false number because you're pretty much going to have to end up selling it for what you bought it for, and that window of time from mid-April to end of May, dealers are going to say, well, I'm not going to sell for that. I had to pay more than that. I'm not going to lose money on this car. It's going for this much at the auction. Well, it doesn't matter.

Customers are dictating the retail market and wholesale won't follow until about two to three weeks after retail starts dropping off. As retail starts dropping off in mid-April, wholesale will start dropping off in May and then it's going to be a catch-22. You have to have the inventory, but to sell it, the gross isn't going to be there. But that's why you always want to keep your inventory lean and clean and be a buyer at current market value, so when the market goes down because nobody's buying, you can be buying because you're not stuck in a bunch of aged cars. And again, this is the next 45 days, dealers are going to have to pay attention to this.

Will the market rebound in Q3 or Q4?

What happens is July and August, we see a little bit of an uptick in shopper activity. Again, a little bit of an uptick in volume, and then I'm talking used cars.

I think a lot of that happened, and I'm talking about tracking this for 10-plus years, we'll start seeing a little bit of a summer uptick. It falls around that July and August area.

I think a lot of that has to do, because I scratched my head at that, and some of its road trips and things like that, people are replenishing cars and stuff. But I think what happens is there's a lot of, and I know this is probably a more true statement now. Again, I have no way to validate this, but watching the shopper patterns, I'll show how I can defend this statement is, I think a lot of that uptick in used car activity.

Now it doesn't go back up to the 100, what I was talking about earlier in February, March, it might go up in the 70s, instead of being down to 40s and 50s shopper activities, it'll go up to about 60, we get a little bit of uptick.

And the reason why I think that happens is I think it's wrapped around the new car summer sales events, Toyota summer sales-athons, right? So there's a lot of good deals happening on new cars in the summer months, a lot of leasing and things like that, that attract people to shop for cars again? The reason why I say I can back that up is back in 2020, 2021, and a little bit of 2022, we didn't have new cars, and so there weren't a lot of summer sales-athons and that shopper index didn't spike back up from 50 to 60. It just kind of stayed the same and trailed down all the way to the end of the year.

If March is at 100 on a scale of zero to 100 on the shopper index, it's down in the 40s by December. So usually we get this March 100% shopper tax season, drops down to about 60s and 70s into going into the spring, and gets into the 50s and tips back up in the 60s or so in July, August, and then goes down all the way to about 40% going into December.

The reason why I bring that up is I don't know if we'll get the used car activity. I think it'll come because I think there's going to be a lot of attention on new cars come summer sales-athons and summer sales events. Inventories there for most manufacturers, Chrysler, Dodge, Jeep, Rams, and mostly Ford stores. The domestics have the inventory. Honda still struggles with it as a little bit there, but the domestics, and especially any Stellantis-type dealership, are already running pretty decent incentives.

I think by summer, the incentives are going to be even bigger. I almost think this year, if it's not springtime or summertime, it's going to be by the end of the year, you're probably going to see some of the biggest incentives ever because interest rates are still high and a lot of people have a lot of negative equity. So if these manufacturers want to continue to sell a lot of new cars, you're going to have to give special rates, which I think Chrysler has 0% or 1.9 for 72 months, but no rebate combination. By summer, I think you get the incentive and the rebate combination going on like, hey, 1.9 for 72 months and three grand rebates to get a lot of new car activity going. I do think that come summer, we're going to get a lot of new car activity, which then what happens is we're going to get a lot of trade-ins, which will continue to make use car values continue to drop. It peaked at like, the average price went from $18,000 to $22,000 average price for a used car, which just shot up.

I think that number is going to be back down to $16,000 after summertime for used cars because we're going to get a lot of trade-ins on new cars.

Now that's speculation. I know we're going to get a lot of new car activity with summer sales events, but I do think used car values are going to get really soft all the way to the next tax season after this window goes if new cars become really popular in the summer.

 How has the market remained this strong with the higher interest rates?

Really what's going to happen until rates get back below that 5% rate is it's the "need market" and not the "want market", hey, I want a new vehicle, no, I kind of need a new vehicle. And that's where I think the market stayed strong too because we got up to, I think over 12-year average for the car on the road. At some point in time, these cars are tapping out and they have to be replaced.

Mine wasn't, but I had an F-350 diesel dually that the warranty was up in six months and I had big old 36-inch tires and they're six tires and they're 500 a piece. It was like $3,000 worth of tires that I would have to replace something and okay, do I do that or get rid of it now while the tires are decent and get something new?

So anyways, I do think it's going to be more of a need up until instead of a want economy, and right now a lot of cars are aging out and they need to be replaced, so that's where it kind of keeps it strong.

I think people are open to refinancing in a year or two when the rates go down. But once they get below that 5%, I think it does open up the floodgates for more things to be sold.

New and used car pricing.

I think used cars are going to drop down to about the $16,000 range this year. I posted on Facebook a while back, probably three or four months ago, that there's a market trend where it showed the average used car went from 14 grand to 16 grand, and then at COVID it shot all the way up to 22,000 and it took about a year or two to do that. But then in less than a year, it's gone already back down to 20,000 and 18,000. And so just the normal trajectory would have put us around a $16,000 average used car price by 2025 or 2026 if COVID wouldn't have happened. We would have gone to 16 grand if COVID wouldn't have happened. COVID did happen, and it jumped up to 22 grand.

It's already down to 18 pretty quickly and I think we'll get to 16 before 2025, 26 because of, like I said earlier, I think people are going to gravitate toward new cars to get the better rate and to get a rebate to help them get out of a car they might've bought in the last two to three years, negative equity wise. Also, I think the deals are going to be good enough, again, going back to these cars being so old on the road.

I do think used cars will go down. I could be wrong, but it might stick around the 18 grand, I think a lot of cars are going to get traded in on new, they're going to be cheaper, 8 grand, 10 grand, 12 grand type cars that people have been holding on to.

I think that will help drive this down. New cars though, Chrysler I know, I think on Jeep they dropped the MSRP 4 grand. Look at what Elon Musk doing with Teslas and they dropped the prices on those, which forces, I think Ford did on their Lightning, dropped their prices.

I think these manufacturers are starting to drop MSRPs down a little bit more realistic. But the technology is there to kind of defend it. I keep looking, I look out the window of the truck I bought, it's got the lane assist and the almost automatic driving, the depth, I mean, I know a lot of cars have that, but the Apple CarPlays, the technology, the automatic headlights, and no emergency brake, I mean, there's just some technology that defends the extra cost on these cars. But I do think we're going to hit a wall with that for a little bit.

I definitely don't think manufacturers, especially like Stellantis are going to keep raising their prices when the inventory is sitting right now. If anything, they're cutting back, which they did on the Jeeps Cherokees, and they're doing the rebates and incentives. That's where I think the incentives get really big. I don't know if they really want to go in there and drop the MSRPs, that way they can a year or two from now keep that type of number, but I think they put these big rebates on them to help offset that added cost that probably not there anymore.

Because you think about it, they went up really quickly because of the part shortage, right? When they have to buy a part for extra money because of the shortage, they're going to have to add it to the MSRP. If the part shortage is no longer there, they can't defend that price range, so instead of dropping MSRP and losing credibility on that, I think they'd throw it in a rebate and make it look like the good guys trying to stir business up.

How does LotWalk help dealers with their used car inventory?

Well, again, so let's talk used cars and a lot of this, especially through COVID, you're going to apply it to new cars too. But I want them to sell their current rate. If they have 100 cars, let's sell 100 cars, okay? You don't need 100 cars to sell 70. If you got 100, let's sell 100.

So let's get the volume there, but increase the gross also, and how you do that is increase the amount of cars you sell fresh. You ask any dealer, when's the best time to make the most money on a car? Day one. If you increase the amount of cars you sell within that first 30 days, your gross will go up and sustain. Our goal is for them to do 60 to 70% of their sales in the first 30 days.

You do that, you're really maximizing gross, minimizing bleed through aging problems and costing your gross, and then your volume kicks in with that. When 70% of your sales are going out in less than 30 days, you're able to turn that inventory faster.

But the new approach also is lead management. One of the things, and the reason why we call it product LotWalk is you do a physical lot walk. You look for any issues on your lot, fill in holes, and dirty cars, but also you do a lot walk to make sure that any customers are out there being met and greeted on your physical lot. The virtual lot, you've never been able to do that before because you have a CRM over here that's run by an internet BDC department that this tool doesn't talk cars. I'll explain that in a minute. And then you have an inventory management tool over here that really doesn't talk customers.

So what we've done over the last year or two is put these two worlds together, and it really exposed to me, because I started doing internet sales in 1997, we've been doing it, not wrong, but we've been doing it the same for 25 years. We follow up with leads based on the age of lead. When we get a fresh lead, we're calling it and emailing it every day, every other day, because it's a fresh lead. and that 30, 40-day lead, we're lucky if they're still following up with them, or maybe it's every other week by then.

What I realized is when we get a lead, we don't know when the customer is two days out or two months out. So managing it based on the age of the lead could be irrelevant to where the customer is in their buying cycle. They're either doing something quickly or starting their research. But I don't know until I get a hold of them. so it's really not an effective way to follow up with leads.

The other area that we're looking at is inventory issues to keep that inventory turning, right? Well, you've got to figure out if I'm not selling 100, carrying 100, selling 100, and not doing 60 or 70 in the first 30 days, I got to figure out why. What's slowing me down? It could be something like your heavy and large pickup trucks.

Our example is, let's say you have 30 in stock and you've only sold, I don't know, 10 of them in the last two weeks. Well, if you sold 10 in two weeks if you times that by two, you're only on pace to sell 20 in a month, but you have 30 in stock. So if you want to turn your inventory every month and you have 30 in stock, but only on pace to sell 20, you're 10 units heavy in large pickup trucks, right? So that could be why you're slowing down. Okay, well, let's isolate large pickup trucks in our inventory.

But here's the next question I would ask a dealer. If you have a truck problem and you happen to have any leads on your trucks, how often would you want to call and email these leads to get your truck sale rate up so you're not just dropping a bunch of prices? And guess what they'll say? I'd want to call them every day, every other day.

And this is the point is, the reason why I said earlier, CRMs doesn't talk cars. You can't go into a CRM and say, give me my truck leads. Much less you can't go into a CRM and say, give me my truck leads where the car's still in inventory and it hasn't been sold from that underneath that customer. Or give me my truck leads that the car's still in stock and I haven't contacted in the last two days.

Because again, if I have a truck problem, I would want to call and email these leads every day, every other day. I don't care if it's a 50-day-old lead or a two-day-old lead. I need to get my trucks going, so let's call and email my truck leads. But again, in the CRM, you can't do it.

Our lot walk tools allowed us to do that now. And we could say, hey, you got a truck problem. Let's isolate the trucks before we make adjustments. Let's go look at our leads. Let's increase our contact ratios over here. And now we can actually attack leads based on situations on my lot and not just based on the age of the lead.

To me, that's a huge concept that we never really had in the industry when it came to inventory management or lead management, these two worlds should be running side by side.

 These two departments should be run by one person or at least share the same office and come up with a game plan every day and say, here's where inventory is struggling. Here's where I need you to focus on the activity with your leads today.

The impact of inventory on Internet leads.

We're recycling the leads. We're marketing, getting all these leads, and what we found was there were three numbers that I thought were important that we found.

The first one is like 60% to 70% of your current active leads, if you look at zero to 60-day old leads, 60 days' worth of leads, 60% to 70% of them are on cars that are no longer in stock. They can't buy the car that they inquired about because the car is sold. So that was one number.

The second number was half of your current leads on the car still in stock, half of those leads are on just 10% of your inventory, so if you have a hundred cars, okay, half your leads are just on 10 cars. I like to tell a dealer, think of a lead as an activity. I get a lead, I'm going to do a call or an email and an activity. So if my team did a hundred calls and emails today, okay, half of those calls and emails, because half my leads are on just, it's just going to impact 10 of my hundred vehicles. Think of that.

The third number was half your cars have no leads. If I have a hundred cars, 50 of them don't even have leads at all. This is where the eye gets, this is really where I open my eyes and go, huh, that means half of my cars get no activity at all. What am I doing about those? And that goes back into marketing dollars. Do I, do I go spend money and advertise this car? Do I drop the price and cost me money or the 60% over here that was on cars and no longer in stock? What if I recycle them?

That customer who wanted that F-150 at $40,000, but it sold last week, it's a 30-day-old lead. Do I just get off of them because it's a 30-day-old lead and the car he wanted, it's no longer in stock? Or where most people, 60, 70% end up buying a different car than they acquired in the first place, right? So why don't we take that 30-day-old lead and say, Mr. Rice, I know that the F-150 you're interested in has sold, but are you open to other large pickup trucks around 40 grand? Because if you are, I got a Ram 1500, I got a Silverado, I got another F-150, right? Offer them a switch opportunity because we would do it on the showroom floor.

So why don't we take the customers over here, the 60% that can't buy the car there anymore, and see if there's a match on my inventory, especially the 50% that don't have leads? Hey, I don't have a lead on this Focus, but I got five people looking for a compact car around 18 grand. Let's call and email them before I just go drop my price.

That’s where I say, inventory management should be lead management and lead management should be inventory management. These two departments have to go hand in hand to maximize those dollars.

Dive into the heart of adult education within the automotive industry in this insightful episode of "Driving Sales, Defining Leadership." This time, hosts Bart Wilson and J.D. Mixon are joined by John Diaz, a seasoned Learning and Development Specialist from Principle Auto Group. With a rich background in educational programs and a passion for adult learning, John sheds light on how adult education principles are revolutionizing training and development in the automotive sector.

Highlights of the Episode:

• Exploring the principles of adult learning in the context of the automotive industry
• John Diaz's journey from educational expert to automotive learning innovator
• Key strategies for implementing effective adult learning programs in dealerships
• Overcoming the unique challenges of adult education in a fast-paced industry
• Leveraging technology and innovative methods to enhance adult learning experiences

Discover the Future of Automotive Retailing with Audi Jacksonville's Success Story!

In a world where digital transformation is key, Audi Jacksonville has boldly redefined the car buying experience. Join our exclusive webinar to uncover how they collaborated with Upstart Auto Retail to revolutionize their sales process, benefiting both their team and customers.

Dive deep into the innovative strategies that led to remarkable results: soaring profits, impressive close rates, and more accessible financing options for customers. Learn from Audi Jacksonville's journey – a game-changer in automotive retailing.

Discover how George Markham & Evan Driscoll of Audi Jacksonville are able to:

• Combine online and in-store digital retail processes
• Continually evaluate and update their approach
• Use AI-powered financing tools to increase car sales and profitability
• Win more customers through effective engagement

Several trends are impacting dealers’ end-of-year inventory. New model year inventory is arriving, old model year inventory is discounted, and inventories are rebounding. These factors can work in your favor - if you avoid the freeze. It’s time to make room and move aging inventory. Leverage machine learning and AI to move your inventory faster.

In this webinar we were joined by Suzanne Reimer, the Chief Marketing Officer for Lotlinx. She dove into these trends and how they will affect your dealership’s profitability. She gave insights on how, with VIN-specific solutions driven by AI, you can implement at your dealership to move your inventory faster this winter. 

We discuss the results of our inventor polls:

Do you know all there is to know on your inventory to move it as fast as possible?

YES: 28%

NO: 71%

Where are you using AI in your dealership?

Inventory Search and Recomendations: 23% 

Consumer Demand: 7%

Digital Advertising: 46%

Customer Experience & Engagement: 15%

Sales Process: 7%

Takeaways: 

• Learn how to embrace AI
• Learn how your dealership’s profitability will be impacted by these trends
• Formulate a solution by leveraging VIN-specific strategies to move your inventory

Listen to learn about these trends that are impacting end-of-year inventory and what VIN-specific solutions you can implement in your dealership.

In this webinar, we dive into the success story of J. Bertolet Volkswagen, a family-owned dealership adapting to the digital age. Discover how they built a connected online to in-store experience customized to their ‘hands-off’ selling process.

Learn how their lead-to-sale rate soared to 4X the national average, and how they grew profit over 400 percent.