How To Manage Auto Inventory Based on the Season
Every year at this time, inventory starts to balloon because of overzealous buying practices during the tax season. Dealers should manage auto inventory on a daily basis and those that take their eye off the ball, tend to have aging issues at some point of the selling season. What steps do you take to make sure each season is as profitable as possible?
Seasonal Approach to Manage Auto Inventory:
Prepare for the summer months. Your inventory approach should be about maintaining your day’s supply to a manageable number, although you want to make sure you have enough. Too much will be an issue sooner than later. Sporty cars and first time car buyers will be a major portion of the business during this season, so stock accordingly.
Make a concentrated effort to not get caught holding inventory too long. All sports cars and convertibles should be priced to sell, quickly. July 4th should be a target for eliminating these types of cars. Price them to sell to avoid having them in the fall. The vehicles you should have by the end of July are trucks and SUV’s. These units will only go up in price for the rest of the year.
Reduce your inventory to 45 days during the fall months; it will pay great dividends at the start of the new year. If you have managed your stock well, you should be in a position to buy cars in November and December when everyone else is selling them. We have all seen prices bottom out during this time, so put yourself in a position to buy now allowing the most bang for your buck.
SUV’s should still be strong, but spring is right around the corner. Watch for convertibles and sporty cars if you have some inventory dollars available. They will never be cheaper than they are right now, giving you the ability to buy them when others are dumping due to age.
These are four simple approaches to manage auto inventory based on the seasons. Managing inventory is a daily challenge, but with these simple rules you can be one step ahead of the competition!