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3 KEYS TO IMPROVED NEW VEHICLE INVENTORY MANAGEMENTBrian FinkelmeyerDirector of Conquest Business Development, [email protected]
THE AVERAGE DEALER SPENDS
ON NEW CAR INVENTORY MANAGEMENT
2–3 HOURSPER MONTHBILLION
DOLLARS INVESTED
$163
of survey respondents on this webinar are unsure of their annual new vehicle inventory turn58%
Nordstrom’s Secret Weapon
3 Drivers to Nordstrom’s Inventory Turn
Leverage data insights about demand to drive
smarter stocking
Proactive pricing to maintain a balanced
inventory
Balance inventories across network of
stores
Pricing DistributionStocking Mix
Polling Questions• What information do you use today for making informed stocking decisions?
• Recent sales history• OEM recommendations• Model line days supply• Total cars in inventory• Intuition/feel
3 Keys to Driving More Profit from Your New Car Inventory
PricingAlignment
of pricing withsupply & demand
Dealer TradesMaking strategicdealer trades toget the right mix
Understanding supply & demand for every vehicle in stock
Inventory Mix
Inventory Mix
A B C
High sales volume combinations
Medium sales volume combinations
Low sales volume combinations
ABCs of Inventory Management
Inventory Analysis
Quartile Group A Cars B Cars C Cars
1 64% 17% 19%
2 56% 19% 26%
3 50% 19% 30%
4 40% 22% 38%
Quartile Group Annual Turns Average Sales Average Gross
1 4.7 137 $327
2 7.5 144 $479
3 6.1 131 $363
4 3.8 90 $197
It Pays to Have the Right Mix
Volume/Speed 0-45 Days 46-90 Days 91+ Days
A Cars 26% 58% 16%
B Cars 24% 43% 33%
C Cars 18% 27% 55%
Speed of Turn is KING
Strategic Ordering – by Model/Trim/Color
Don’t Reorder Slow Moving Vehicles
427 Days Old
Polling Questions• How often does your dealership adjust price?
• Daily• Weekly• Monthly• Other
Pricing
MSRP Straight Line Discounting
Understanding Opportunities Where You Need to Be More/Less Aggressive
= $1,740 Loser?
Are We Giving Away Gross Unnecessarily?
11 Days in Stock 37 Market Days’ Supply Only gray version in
the market
- $25,484
- $25,930
- $24,740
Price to Market and Price Based on Age
Dealer Trades
Dealer Trades:The Daily Grind
Dealer Trades Should Be Given More Attention
• 30% of the new car inventory is impacted
• 15% of cars older than 365 days are dealer trades!
How Can This Work at Your Dealership?
GREEN
Inventory Health Check Questionnaire
Stocking ------------------------------------------------------------------What is my New Vehicle Aging Policy?
Pricing ---------------------------------------------------------------------What is my New Vehicle Pricing Policy?(Aging & market considerations)
Dealer Trades -----------------------------------------------------------What % of my sales require dealer trade?
Health Checklist AMBER
Target is 65% < 90 Days
Price early, not late
< 20%
RED
Quartile Group
AnnualTurns
Annual Gross
Annual F&I and Doc
Floor Plan Credits
New Vehicle Department
1 4.7 $241,293 $847,847 $359,478 $1,448,618
2 7.5 $405,953 $973,778 $419,178 $1,798,909
3 6.1 $267,930 $848,077 $387,961 $1,503,968
4 3.8 $82,364 $480,282 $255,284 $817,930
Implications on the Bottom Line
Automotive News Articles
Q & A
Thank You!Brian FinkelmeyerDirector of Conquest Business Development, [email protected]
