Life as we know it has changed as a result of COVID-19. Car dealerships have begun to introduce new ways of selling, online. The unprecedented interruption of our automotive industry has forced us all to start shifting. Shifting our focus more and more to data as the oil in making informed decisions. But how important is data to car dealerships today?

I recently caught up with Bobby Petkov, Owner of MitMak Motors. Bobby says that the 2020 year was one of the hardest ever in his motoring career and the automotive industry. Though he recognises it as his hardest, he agrees that it was also the most rewarding. MitMak Motors experienced 40% growth in sales Year-on-Year. Interesting that MitMak Motors’ growth almost mimics the growth seen by AutoTrader of between 40% and 55%, even up to 60% across traffic, search and conversion.

Data helps car dealerships capture consumer attention

Data has never been more important for car dealerships. Especially now that the used car industry is buoyant. This means that the competitiveness of car dealerships is even more fierce.

Dealerships like MitMak Motors are constantly working hard to get the attention of the consumer. But, what matters is what one does with attention to generate a lead, or even a sale. Capturing car buyer attention with not only the right vehicle, but the right message. This will ultimately determine whether a delivery takes place or not. In 2021, it is evident that car dealerships need data that shows which makes, models and variants are in high demand. And which ones are in high supply. As well as what live market pricing and car valuations are doing.

Bobby relies on the data from AutoTrader’s latest Bi-Annual Car Industry Report (Download it here: reports.autotrader.co.za) to see the car brands, models and variants that consumers search for on AutoTrader and what brands they ultimately buy. Example: Searches for a BMW tend to be high, but consumers may end up buying a VW Polo. It’s this kind of car buying behaviour that informs car dealerships which brands to stock so they don’t lose the attention of the consumer buying a car. For car dealerships to achieve this, they need to have their finger on the pulse with consistent live market data. After all, the profit is in the buying and not in the selling, as Bobby eloquently puts it.

Car dealerships who use data effectively sell more vehicles

Car dealerships like MitMak Motors who have been using data effectively, ultimately get to sell more cars. How? By using a combination of historical data, live market data, experience and market research. These car dealerships have seen an almost immediate shift on their car dealership floor. Small examples are in how one looks at the nuances between in demand and supply of vehicles like the Toyota Hilux and Ford Ranger.

For example, MitMak Motors never sold many Toyota Hilux bakkies, which according to the previous AutoTrader Car Industry reports showed that the Toyota Hilux was in the number two spot with Ford Ranger having overtaken it. However, this year, The Toyota Hilux made made a come back. This has translated directly into the number of Toyota Hilux bakkies MitMak Motors has sold in 2021 so far. They have sold more Toyota Hilux’s in 2021 than in 2020 during the January – February period.

Bobby Petkov encourages car dealerships to keep their fingers on the pulse. Use data from reports we compile as this will help them know which variants sell well.

 

Car valuation companies don’t have their finger on the pulse

It’s clear that car dealerships like MitMak Motors using car demand, supply and sales data effectively. But, valuation companies are lagging behind. By not having their finger on the pulse when it comes to live market data. The fact that car dealerships are still using flawed historical car sales data only, makes it difficult for car buying decisions to be made.

If car values change weekly or even daily, car dealerships can’t go too far into history with car pricing data, because those values will be irrelevant e.g. what a car dealership would have paid for a Toyota Hilux a year ago would be irrelevant in the today. Which means car dealerships ALWAYS need fresh data to make informed car buying decisions, to make better profit margins.

Car valuation companies in South Africa today are still using antiquated methods of data collection from 20 years ago and haven’t adjusted in 2021. Ultimately, they will get left behind.

Retail back valuation strategies – the only way forward for car dealerships

Profitable car dealerships in 2021 are those that use retail back valuation strategies – what do I mean? They work backwards to what they are going to pay for the car, rather than looking at historical data. The next question for this to be successful is the notion of live market data, how live does the data have to be?

Bobby for example identifies how much he will sell a car for then works backwards to what he’ll pay for a car. He believes that if car dealerships don’t employ this tactic, they will never be able to buy good quality car stock that sells.

The only way one can get to know the right price to buy at, is if one constantly uses live market data to inform buying decisions. It’s through reports such as the 2020 AutoTrader Bi-Annual Car Industry report that give car dealerships a 6 or even 12 month view. Even more live than that is AutoTrader SA product called Fuzion that gives car dealerships access to even more recent live-market data. This ensures that car dealerships don’t miss out on buying cars at the right price, or even stocking their car dealerships with cars that will sell.

The innovation curve has compressed for car dealerships

The innovation curve has compressed for car dealerships. Before COVID-19, car dealerships had plateaued, innovation was slow, however, after COVID hit, the entire automotive industry slate was wiped clean in just a few months – it was like the reset button was pushed.

COVID forced the entire industry to become even more reliant on data than ever before. The speed at which changes are being implemented now means car dealerships and the automotive ecosystem needed to adjust or risk extinction.

Some car dealerships haven’t innovated fast enough

Some car dealerships haven’t innovated fast enough in using live market demand, supply and price data.  Which has led to opportunities for innovative and disruptive companies to take the consumer trade-in away from the car dealership.

Bobby believes that acquisition companies never took anything away from car dealerships. Car dealerships gave them an opportunity on a silver platter. Creating more options for consumer to sell their cars. He calls on car dealerships to start using data to price cars right when buying. Don’t lose out on the trade in.

MitMak Motors continues to innovate in the automotive industry

It’s encouraging to see car dealerships like MitMak Motors continuing to innovate in the industry even in a pandemic. It’s because of this innovation that they have seen 40% growth in 2021.

Bobby constantly strives to get his share of consumer attention by employing a combination of science, data, creative tactics. As well as the RIGHT people to make sure his car dealership brand stands out from the noise. He has also invested in technology to provide an efficient and seamless buying experiences for the in-market car shopper.

MitMak Motors has successfully built a brand that speaks to both the out of market car shopper and in market car shopper making it easy for potential car buyers to choose them. All these efforts build trust in his brand using creativity. Constantly shifting and changing creative marketing strategies to see what is working and what isn’t.

It’s evident MitMak Motors hasn’t created a silver bullet to achieve these growth numbers, they have executed well on a thousand little things that help attract attention to their car dealership.