2020 Auto Industry Review: 5 Steps for the Industry to Combat COVID-19

December is traditionally one of the Automotive Industry’s best months.  However, as with everything else, Dec 2020 brings about some unanswered challenges.

  • Conquering the ramifications to business wrought by COVID-19
  • Inventory access to vehicles new & pre-owned
  • Stability of the economy & the industry throughout the vaccination process

The immediate future of the Auto Industry might be brighter than you think. Some of this is due to recovery, but some of it, is based on the industry’s resilience and transformation.

  1. Inventory Recovery

According to Cox Automotive, as of mid- November, the inventory crunch has passed. Only 3% of available inventory is model year 2021. In comparison to last year, new model inventory was 25%.

Still, new-vehicle sales are performing well. According to Charlie Chesbrough, senior economist at Cox Automotive: “Available Inventory is far below last year’s levels, yet sales continue to show surprising strength.”

  1. Tailored, Targeted Messaging

There is still demand for cars, particularly across these segments:

  • Lease-end customers wanting a seamless offer to quickly get into their next vehicle
  • College graduates seeking reliable vehicles
  • Frequent Buyers who want a car every couple of years
  1. Promote Unique Service Propositions
  • Deliver test drive vehicles – Eight of every ten auto shoppers prefer to test drive, and dealers are starting to offer delivery for test drives. Alternatively, buyers can book appointments for an unaccompanied test drive on-site.
  • Sanitize all vehicles – Continue to over communicate this message long after shelter in place is over
  • Carrying the Car – Promote reputation for efficiency and dependability instead of volume and tradition. Offer free pickup and delivery for service appointments, or even newly purchased vehicles.
  1. Capitalize on Year-end promotions

Dealerships are making deals to sell off the 2020 models still on their lots, just as new 2021 models arrived just in time for Black Friday sales.

Two key December promotions:

  • Financing offers to reduce or eliminate the cost of interest on auto loans
  • Cash back offers, or rebates, lower the overall price of the car

 

  1. Accommodate Walk-ins

Walk-Ins remain the most common form of initial contact with a dealership by more than half of car shoppers according to Autotrader.  Dealerships should leverage multi-channel media campaigns to drive prospects into their show room to begin the sales journey.

While COVID-19 is forcing dealerships to re-think their business, some things remain the same. Many people enjoy the emotional rush of car buying.  And while this rush may never change, how customers wish to experience the purchase of a new car has evolved and will likely remain more distant and digital in “the new normal”.

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