The unsellable car and a few other problems facing car dealers right now

We are always looking for signs of recovery during an economic downturn, and almost any chink of light is enough to make us think that things aren’t quite as bad as people say they are. Unfortunately for every little bit of good news there always seems to be far more gloomy indicators hot on their heels.

For example we recently heard that house prices were set to increase by 16% over the next few years, great headline but for many people this prediction will only take them back to where they were when they bought their hoses 3 years ago. Inflation is rampant and the threat of raised interest rates is ever present, all this leads to a lack of confidence by consumers who keep their money in their bank accounts and believe they can’t afford to do the things they originally planned to do. In the car business this has a dramatic effect on sales and will often mean that certain cars become virtually unsellable.

Buyers are tending to fall into 2 categories; those looking for a much more economical, cheaper proposition and the other looking for the absolute bargain of the century. This leads to a fall in volumes and erosion in profitability and dealers finding themselves massively overstocked tend to start distress selling in order to keep a tight control of their stock management.

Of course, for the car buyer, this can be positive, they can be confident they can get a great deal and that there is plenty of choice but for sales execs, with major pressure being put on them, it can lead to desperation measures and cutting corners by telling customers exactly what they want to hear just to get the sale closed.

Showroom and online footfall is very definitely down and car dealers will need to look at alternative ways in which to entice buyers into their showrooms and by looking at different marketing methods perhaps this can be achieved. It is vital for them to stand out from the crowd and make a compelling case for a buyer to choose them over a rival, although I am sure even now there will be car buyers who will have an instance of trying to get served in a showroom and being virtually ignored.

At the same time finance refusals are again on the rise and it appears that lenders are still very nervous about loosening the purse strings which has an adverse effect on sales rates but also staff morale.

For a sales exec to spend a long time with a buyer delivering a great experience and agreeing a deal only to be told 2 days later that the customer doesn’t qualify for funding must be very disheartening for both buyer and sales exec alike.

During times like now experienced dealers with dynamic managers and staff will navigate through these choppy waters, because they understand that by doing what they have always done will always get them the same result.

Doing things differently (but well) and standing out from the crowd should ensure that customers will keep coming to buy their products and services. Unfortunately we can’t tell you what that difference is but you’ll know it when you see it!

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One Response to The unsellable car and a few other problems facing car dealers right now

  1. cadbydonewell June 7, 2011 at 7:01 am #

    I wanted to buy an 08 registered VW Tigaun and looked online to see the same cars with the same toys have a spread of £3,000 in price differential. Confused from Swindon

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