This June, ZeroSum data shows that new vehicle inventory levels remain flat, while used vehicle inventory decreased almost two percent. Despite lower used inventory levels, used car prices decreased while new car prices remain on the rise.
Meanwhile, semi-conductor chip shortages continue to impact the strategies of auto makers. In 2022, total vehicle sales is expected to be about 83 million, but OEMs are forecast to order chips for about 120 million cars to mitigate risk associated with the shortages. The good news for dealerships is that new car prices are still high, but they will need to keep an eye on the rapidly evolving market to ensure they stay competitive.
ZeroSum’s Take: What You Need to Know
With consistent levels of new inventory and rising new car prices, dealers continue to benefit from increased levels of profit. However, consumers are not always willing to pay above MSRP for a car. As used car prices begin to fall and consumer uncertainty rises, dealers will need to accelerate turn rates and mitigate operating costs to maintain profit levels.
Here are your key takeaways:
Market your used cars. As new vehicle inventory remains tight and sales targets are harder to meet, dedicate some of your budget to selling your pre-owned inventory.
Price competitively and buy strategically. Used car prices are falling, meaning you will need to keep an eye on pricing trends to ensure you stay competitive. At the same time, you may need to be more conservative than before with buying used cars.
Win priority allocation from your OEM. When inventory is low, manufacturers allocate the most cars to the dealers that sell them the fastest. Turn cars faster than others in your market to win more inventory.
To read the entire report and view supplemental charts, visit our website: https://www.zerosum.ai/blog/zerosum-market-first-report-2022-6
About ZeroSum
ZeroSum is a leader in software, marketing, and data. Powered by its SaaS platform, MarketAI, ZeroSum is simplifying and modernizing automotive marketing by leveraging artificial intelligence, data, and scaling ability to acquire new customers. ZeroSum is the first and only company that matches consumer demand with automotive data in real time. For more information, visit www.zerosum.ai.
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SOURCE ZeroSum