When your brand’s market share is tanking, make sure you have a used car selection to weather the storm. You as a dealer, cannot change the buying patterns of the market, but you can be smarter than your competitors by keeping ‘as is’ and non certified used cars in your inventory to address what people are buying – even if they are backing off of your new car selection. This may not make the OEM happy, but it’s their job to sell your brand, it’s your job to stay in business.
We all know that ‘primo’ used cars are at a premium right now and that their supply is very much fought over. This makes the model of a franchised dealer only carrying late-model certified vehicles a case of you competing against yourself (new vehicles) as well as every other dealer. All this does is reduce your gross profit on these vehicles due to the expense of obtaining them and the margin that you have to settle for.
Paradigms shift without most poor fools knowing that they have shifted. The smartest and most successful franchised dealers I know are changing the makeup of their used car inventory to meet the sweet spot; cars in the $8,000 to $11,000 price range. This may mean that you don’t stick with only your brand and it also means that you may offer a much higher percentage of ‘as is’ vehicles that you would have passed on as wholesale in the past. The old model of carrying 80% to 90% of used car inventory in your brand is now being replaced by more of a 50%/50% split…sometimes even less of your brand if the dealer finds that advertising used Chevrolet’s and GMC’s at a Honda dealership is paying off.
My advice is: Don’t fight the paradigm shift, address it. Your brand and it’s market share are the only concern of the OEM, your concern should be to remain viable and profitable and attract customers.