As vehicle availability continues to challenge both dealers and shoppers, CarGurus is happy to introduce a new monthly report from our Director of Industry Insights & Analytics, Kevin Roberts. The Vehicle Availability Index & Insights report will deliver his in-depth research and outlook for coming months.
The US auto industry continues to be buffeted by COVID-19, though not as directly as we witnessed last year. The lack of available semi-conductors is creating major hurdles for OEMs, suppliers, and dealers as Q2 production plans have been further impacted.
New inventory levels remain impacted not only by limited production, but also by a historically high level of consumer demand for new vehicles. This surge in private mobility appetite has increased sales, and coupled with production constraints, further reduced inventory availability. The CarGurus Vehicle Availability Index dropped to 36.8 for new vehicles, a decline of 51.9% compared to last year. However, we witnessed a promising sign with used inventory holding steady at 88.2, a slight increase of 4.3% year-over-year.
Inventory acquisition has long been a pain point for dealers. It requires a combination of data, precedent, and dealer’s intuition to keep a lot stocked with in-demand vehicles that will move. And that’s before you consider other factors that fluctuate like changing consumer behavior, economic trends, and unanticipated events that affect supply and demand.
Dealers have been weathering changes and adapting their strategies for decades. However, the Covid-19 pandemic has had an unprecedented impact on the industry—particularly, on supply. It’s led to auctions moving online, manufacturing plants being shut down by OEMs, lease extensions, and an overall shift in consumers’ preferences. Together, these variables have added up to a shortage of quality new and used vehicles unlike ever before.
To get a pulse on the topic of supply and hear some ways dealers can adapt, we checked in with CarGurus’ Dealer Relations Team Lead, Benjamin Sacks.
The current pandemic has had an economic impact on nearly every sector and the auto industry is no exception. It’s left many car dealers feeling the need to tighten their belts in terms of marketing spend. But whether you just had your strongest month yet or sales are a slow trickle at your dealership, your digital marketing investment should remain a priority.
Here are three mistakes you should avoid making with your marketing during today’s pandemic.
Historically, consumers have turned to the used vehicle market during recessionary times as an alternative to a new vehicle purchase. That’s because used cars tend to be more affordable, allowing consumers to avoid the burden of a high monthly payment when money might be tight.
But there’s another factor driving the current shift to the used vehicle market—in particular, Certified Pre-Owned vehicles (CPOs)—and that’s low days’ supply of new inventory. The shortage of new vehicles is a result of plants remaining closed, and it’s making it difficult for consumers to find the specific new cars they want. While new and used vehicle sales posted double-digit losses in June, CPO sales posted an increase of 8.5% as compared to June 2019.