Many Dealers Still Leveraging Markdowns Even Though Majority
Don't See Traffic Increasing To VDPs
DETROIT, Sept. 17,
2024 /PRNewswire/ -- Lotlinx, the auto
industry's leading VIN-specific data company for dealership
inventory management, announced today results of its latest
industry survey, which took the pulse of today's auto retailers in
understanding how they are managing inventory carryover strategies,
and where they are seeing the greatest challenge with markdowns as
it relates to aging inventory. Click here to see the full survey
results infographic.
The success of today's modern auto dealership hinges
significantly on its ability to manage inventory effectively. This
task is fraught with challenges that can directly impact
profitability, customer satisfaction, and overall operational
efficiency. Despite the availability of advanced technological
solutions, many dealerships are still challenged by outdated
inventory risk practices that exacerbate their struggles. One of
the most pressing issues is the failure to properly manage
inventory carryover risk levels, coupled with an underutilization
of sophisticated technologies like artificial intelligence (AI)
that are available to modernize these new inventory strategies.
Lotlinx commissioned an online survey and presented it to more
than 2,500 dealers across the U.S. during August. Below are key
findings from the data:
According to the survey results, the majority of dealers see the
greatest inventory challenges because of difficulty in moving older
models (56%), followed by limited dealership space and increased
holding costs.
The majority of dealers (18%) manage inventory carryover with
price markdowns, dealer trades, and extended warranty offers,
followed by 16% conducting aggressive marketing campaigns. In fact,
40% said they execute price markdowns on a weekly basis. However,
many dealers see great challenges with markdowns, and more than
half (53%) said they receive pressure from manufactures, 52% said
competitive market pressures, and 43% said brand devaluation.
The effectiveness of markdowns may be misleading since roughly a
third of dealers said markdowns spur an increase in VDP views only
25% of the time, and 19% of dealers said it never spurs an increase
in VDP views for a specific vehicle.
There is also a disconnect in dealers' perceptions of the
effectiveness of AI on inventory carryover risk and markdown
strategies, and the way dealers are currently leveraging tools such
as AI. The survey showed that only 9% of dealers are leveraging AI
to better manage markdowns, but nearly half of dealers (46%) say AI
will impact their business the most for inventory management in the
coming years.
"The challenges faced by today's auto dealers in managing
inventory carryover risk levels are compounded by outdated
practices and underutilization of advanced technology,"
said Jason Knight, CEO of
Lotlinx. "By embracing AI and other sophisticated tools,
dealerships can completely modernize their inventory strategies,
reduce risks, and enhance profitability. The journey toward
modernizing inventory management may be complex, but the rewards of
increased efficiency, reduced costs, and improved customer
satisfaction make it a worthwhile endeavor. As the industry
continues to evolve, dealerships that adapt and innovate will be
best positioned to thrive in the dynamic world of automotive
retail."
Click here to see the full infographic and for more
information, please visit www.lotlinx.com.
About Lotlinx
Founded in 2012 and based out in Peterborough, New Hampshire, Lotlinx is the
automotive industry leader in VIN-specific data solutions for
inventory risk management. The Lotlinx platform provides automobile
dealers and manufacturers with enhanced operational control over
their retail business. Leveraging state-of-the-art real-time data
and machine learning technology, Lotlinx provides a precision
retailing solution that enables dealers to automatically adapt to
market dynamics, mitigating inventory risk through VIN-specific
strategies. To learn more about Lotlinx, please visit
www.lotlinx.com.
For more information
John Sternal
Merit Mile
561-362-8888 – office
954-592-1201 – mobile
jsternal@meritmile.com
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SOURCE LotLinx, Inc.