The best news in the auto industry now is that online vehicle shopping is up 30% according to Autotrader and Kelley Blue Book. That means there is a strong interest in the market for potential buyers and used cars is what automotive dealers should focus on this Memorial Day weekend.
Holiday Travelers are Staying Home
Memorial Day is normally a huge travel weekend, but that is out this year. With fewer restaurants open and several states that still have stay at home orders, many holiday travelers are staying home this year. That is a positive for auto dealers especially in states like Georgia and Florida that have begun to re-open. At last count there were more than 11,000 dealers offering home delivery services.
Tight New Vehicle Inventory
With most vehicle manufacturers shut down since late March, this has made new car inventory the lowest volume in over a year with only 3.3 million vehicles available. Low inventory means less options for buyers, particularly vehicles with popular high value options packages. Most of those have been snapped up in the last few weeks with the 0% deals last month. This is bad news for New car dealers heading into this Memorial Day weekend.
Used Cars is What Auto Dealers Should Focus on This Memorial Day Weekend
While new-vehicle inventory is low, the opposite is true for used-car inventory levels. Used car sales had mostly recovered by the second week of May and there is plenty of wholesale inventory available for dealers. According to Manheim, inventory levels at auctions across the country is higher than normal by a whooping 40%.
Keeping this in mind, automotive dealers should focus on switching potential new-car customers to comparable Certified Used vehicles that offer better warranties and usually offer financing incentives as well. That is a much better deal for customers and a win-win for all parties.
The Big Picture
New car incentives always play a big role in consumer demand and customers seem to believe there are great deals to be had. This will draw customers to your showrooms for this Memorial Day weekend. The usual Memorial Day blowout incentives lag this year due to low new-vehicle availability, so this gives dealers the perfect opportunity to move customers to Certified used cars.
Either way, if you have an available new car that meets your customers’ demands or you can guide your customer to a comparable Certified used car, I believe this Memorial Day weekend should be a good weekend for auto sales and a welcome sign of a much-needed recovery.
What are your thoughts on the current climate of the automotive industry? Let me know by leaving a comment below so we can start a conversation.
