Fall 2011 issue of Horizons

Toyota lost the largest amount of market share during 2010, going from approximately 17 percent in 2009 to approximately 16 percent in 2009. All other manufacturers did not experience an increase or decrease in market share greater than 1 percent. Industry experts continue to predict that new light- vehicle unit sales will increase in 2011 by nearly another 10 percent; however, there remains some concern that the impact of Japan’s tsunami will create an inadequate supply of cars and trucks for the remainder of the year and will ultimately hurt international new-vehicle sales. To validate this concern, the NADA recently calculated that total automaker inventory remained below the desired 60 days of supply. The days’ supply of domestic vehicles decreased down to 54 days as of April 2011, and some of the faster-selling imported vehicles dipped below 35 days’ supply as of April 2011. Despite this concern, a March 2011 survey conducted by the NADA Industry Analysis Division reported that 57.5 percent of dealers expect an increase in profit during 2011, while 35.8 percent of dealers expect no change in profits during 2011, and only 6.7 percent of dealers expect a decline in profit during 2011. Speeding the Customers’ “Buying Cycle” As dealers and industry experts remain cautiously optimistic about 2011 and beyond, they are continuing to explore innovative ways to increase new light-vehicle sales. One popular method used by dealers is to contact customers, who either have equity in their vehicles or good payment histories with vehicle leases, with offers to get out

According to Automotive News , dealers are typically able to offer these customers new vehicles with attractive payment options that are similar or less than the customer’s current payment on their older vehicle. Boyd Wagner, CEO of AutoAlert, Inc, estimates that “ten to twelve percent of existing clients are not on salespeople’s radar but are in a position to drive off in new vehicles and keep their payments the same.” As an added benefit to the dealers using this market approach, the process is giving dealers better used- vehicle inventory during a time that there is more demand than supply for used-vehicles. According to R.L. Polk & Company , an automotive data and marketing solutions leader, fewer than 50 percent of customers who purchased or leased a vehicle in 2009 chose their previous brand. Furthermore, of the 4.5 million new-vehicle buyers who returned to the market in 2009, only 30 percent of them were loyal to their previous dealer. Using Software Programs To Build Business To entice new and previous customers, many dealerships are utilizing new software programs which help them speed up their new-vehicle unit sales and improve service volume and revenues. There are a number of relatively inexpensive factory and third-party software programs. A few of the featured software programs in a recent Automotive News article are:

Third-Party Software Programs COMPANY

PRODUCT

AutoAlert, Inc.

Auto Alert

BMW

Loan Loyalty

eLEAD CRM

GoldDigger2.0 Xtream Service

of leases and loans early — before the customers have even begun shopping for their vehicles.

HCD Software

Intelligent Marketing Systems

DealActivator

Prospect Vision

PV Advantage, PV Direct

Reynolds & Reynolds

Equity Calculator

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