Sell What You Can See; Don't See What You Can Sell

Recent articles in The Automotive News (AN) address an age-old topic no dealer principal can ignore--lot rot, or, the costly practice of maintaining a large inventory in hopes of grabbing a buyer’s attention. Mega corporations such as GM and BMW have tried to transition buyers to the build-to-order model, without success.

AN news writer Larry Vellequette identifies the “legendary impatience of American car buyers” as the key reason for the continuation of the industry’s way of doing things, despite its expense.

European buyers tend to order more cars that are built-to-order. While a customer special ordering a car is added business, it represents a lost opportunity to defray the dealer’s cost of carrying the inventory. Dealers can debate the best way to sell a car and make a profit all day long. What we can agree on is that dealers in the United States have an excess of tens of millions of dollars of their money sitting on the lot, aging and depreciating. Turning metal back into dollars as soon as possible is critical to the dealer’s bottom line. So how can a dealer alleviate $30,000 to $40,000 units from a floor plan and still offer the customization that build-to-order boasts of?

The allure of a built-to-order vehicle is the ability to handpick the details of your new car. Rather than perusing hundreds of vehicles in the lot, consumers can walk into a dealership with specifications and leave without compromise. The downside? There’s no instant gratification—and instant gratification is an epidemic in today’s culture. Right or wrong, if a consumer can’t get what he wants from you (and fast), he’ll go elsewhere. However, there’s a way to let a customer have it his way, and to reduce existing inventory.

Vehicle Personalization offers the opportunity for a consumer to get the personalized vehicle he has in mind, and to take delivery of an in-stock unit rather than a special ordered factory car. Offering personalization to your customer at the point of sale brings additional profit to the showroom, and it can chip away at the unavoidable cost of stocking the lot. With a wide variety of OE, aftermarket, and your own creative packages at your fingertips, customizing an existing vehicle to fit the consumer’s lifestyle is instantly within reach.

The automotive industry is consumer-driven, and American consumers have rejected the build-to-order model. Dealers can create satisfied customers, and still defer carrying costs by tapping in to the multi-billion dollar accessories industry.