Heading into Q4, now is the prime time for dealers to look back at the year to analyze what happened – and prepare for what lies ahead.
Understanding evolving buying behaviors and automotive sales trends is the key for proactive dealers to stay ahead. With Q4 2023 wrapping up, it’s a pivotal moment for dealerships to reflect on the projected trends, their performance metrics, and how the market dynamics have evolved over the years.
In this blog post, we’ll explore the automotive landscape in Q3 2023, providing insights into the state of dealership sales, inventory management, customer engagement, and loyalty as dealers head into Q4 and beyond.
Q3 Reflection and Q4 Projections
In Q3 2023, dealerships witnessed the actualization of several trends that were projected earlier in the year. But as we pivot from quarter to quarter, it’s crucial for dealers to not only reflect on past performance but also to create a thoughtful roadmap for success.
Understanding how your dealership performed in the past as compared to the rest of the industry enables dealers to better predict their future performance as the market continues to change. Data is pivotal to this process.
To plot their approach, dealers need to understand how the industry performed in Q3, starting with:
Sales VelocityInventory AcquisitionCustomer Retention & Loyalty
Sales Velocity
Dealership sales velocity in Q3 set the tone for the quarter to come.
According to S&P Global Mobility, U.S. light vehicle sales in September remained relatively consistent, with a projected volume of 1.30 million units.
Sales were stable throughout Q3 despite affordability and rising interest rates pushing some buyers out of the market. However, the daily selling rate metric in September reflects a continued deceleration from the monthly readings in March-July. Coupled with ongoing UAW strikes, sales projections for the remainder of 2023 become much less certain.
These factors emphasize the importance of dealers remaining vigilant, adaptable, and data-driven in their sales and marketing strategies. By closely monitoring market conditions and consumer behavior, dealerships can position themselves to respond proactively to changing dynamics and maximize their sales potential as they head into Q4.
Inventory Acquisition
Dealerships faced a mix of challenges and opportunities related to inventory acquisition and management in Q3. According to S&P Global Mobility, total advertised dealer inventory dropped slightly in September compared to the previous month but remained steady at 1.966 million units. By the end of Q3, inventory levels showcased a consistent climb from 1.6 million units since late December 2022.
Looking forward to Q4, dealerships will likely continue to struggle with the task of selling outgoing model-year vehicles. This is particularly true for luxury OEMs that use exclusivity as a sales tactic. The luxury domain has deftly managed the 2023 model year sell-down, slashing figures from 305,000 units in mid-July to a trim 275,000 by mid-September.
For mainstream brands, strategies to sell down 2023 inventory vary considerably. Chevrolet dealers are ahead of the curve with more 2024 models advertised, matching the pace of Ram’s ’23 selldown with its ’24 ramp-up. In contrast, Ford reached a new high for 2023 models in dealer stocks as of the week of September 11, with hardly any 2024 models listed. Toyota and Honda, on the other hand, have navigated through their inventory challenges driven by supply limitations and new model launches, respectively.
These varying inventory trends hint at a complex yet opportunistic scenario as we approach Q4 2023. Meaning, precise data and flexible strategies will be key to effectively managing dealership inventory.
Staying informed and remaining ready to adapt will be crucial for dealerships to optimize inventory acquisition and management. By ensuring they are well-prepared to meet market demands and transition smoothly into the year ahead, dealers can maintain their competitive edge in a rapidly evolving automotive landscape.
Customer Retention & Loyalty
As we head into Q4 2023 with a rise in both vehicle supply and models on the horizon, the scramble for consumer attention is set to grow.
Today’s automotive shoppers are on the lookout for personalized engagements and relevant offers, leaning heavily on digital tools to help them on their journey. The diverse buyer personas, vehicle preferences and purchasing decisions call for a more nuanced, targeted and dynamic approach to messaging in order to hit the right chord with potential customers at the exact right time.
Turning challenges into opportunities starts with using data – and the most important thing about these strategies is having accurate data at your disposal. Here are four key strategies that dealerships can adopt to sharpen their messaging, cut down on wasteful outreach, and bolster marketing ROI as we navigate through Q4 2023 and into the new year:
Implement Vehicle Verification
Leveraging vehicle verification technology to accurately assess the current ownership This step helps to cut down on wasted impressions and avoid irking customers with irrelevant offers by targeting the right customers with the right messaging.
Enrich Customer Profile
Go beyond the last transaction to build a well-rounded household profile for your customers. This involves understanding the different vehicles owned, financial standing, lease details and brand loyalty, which in turn facilitates more tailored interactions
Resolve Identity Gaps Through Data Accuracy
Incomplete or inaccurate identification data can be a roadblock in reaching the right customers. Ensure your customer data is clean, consistent and up-to-date. Investing in this sort of data quality can significantly cut down database management costs and boost the odds of your messages reaching the intended recipients.
Leverage First-Party Assets to Scale Audiences
Utilize the valuable data from your CRM profiles to create look-a-like audiences. By identifying and categorizing specific audiences as qualified prospects, dealers can tailor marketing messages to engage these new customers, adding them to their CRM and expanding their conquest portfolio.
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As we close out Q4 2023 and gear up for Q1 2024, reflecting on past performance and preparing for upcoming market trends is crucial for continued success. By harnessing the power of data-driven insights, dealerships can make informed decisions, adapt to changing market conditions, and ultimately achieve success.
Want to learn how Mastermind can support your dealership goals now – and in the future? Request a demo.
