Sales Trends: Dealership Opportunities to Grow Brand Share

by automotiveMastermind

From the rise of electric vehicles to shifting consumer expectations, the challenges for dealers in today’s evolving automotive retail market are real. But so are the opportunities.

By proactively adapting to changing buying behaviors and using data to create value for their customers, dealers can stay ahead of sales trends and achieve sustainable success. In this blog post, we’ll explore how dealerships can navigate this evolving landscape and leverage new technologies to ultimately grow their brand share in the years to come.

State of Automotive Retail

Today’s automotive buyers have more channels, touchpoints and vehicle options influencing their purchasing decisions, putting additional pressure on brands and dealers to maintain their loyalty customers and grow their market share.

According to S&P Global Mobility, consumers now have over 450 nameplates to pick from when shopping for a new vehicle, with the number expected to increase by 30%, or to around 650 nameplates, by the end of the decade thanks to the continued rise of electric vehicles. At the same time, new vehicle ownership costs have also risen by 30% since 2019.

High prices combined with more choices and channels to shop around have had a significant influence on customer loyalty. According to S&P Global Mobility, industry-wide brand loyalty sits at just 53% (April 2024), meaning more than half of new vehicle buyers are switching brands with their next purchase.

Impact on Future Outlook

As automakers balance demand dynamics with inventory and production, the outlook for the global auto industry in the second half of 2024 remains challenging.

In July, S&P Global Mobility reduced its outlook for North America’s light vehicle production by 125,000 units for 2024. The Detroit 3 manufacturers are particularly struggling with excessive inventory levels and balancing sales and production. The 2025 forecast was also revised down by 1.6% due to expected further inventory corrections.

These regional adjustments highlight the challenges faced by the global auto industry in balancing demand, managing inventory and adapting to changing market conditions. However, within these challenges lie opportunities for dealerships to turn the tide and grow their brand share – if they take a proactive, data-driven approach.

Turning Challenges into Opportunities

Despite these obstacles dealerships have a unique chance to thrive. Automotive marketing has always employed a large arsenal of tactics to engage customers and drive dealership traffic – and today’s marketing tools are more powerful than ever.

Dealers can use technology and data to develop advanced audiences, refine messaging strategies, enhance digital communications and improve measurement solutions. These tools help dealers overcome challenges in managing inventory and balancing demand by providing deeper insights into customer behavior, allowing for more precise targeting and personalization.

By taking this data-driven approach, dealers can effectively turn challenges into opportunities to grow their brand share by:

Embracing the Electric Future

While automakers are adjusting their production to meet customer demand, S&P Global Mobility’s analysis of current U.S. retail advertised inventory data finds that inventory is still on the rise, with EV inventory continuing to grow faster than the overall industry. The average vehicle inventory age has increased nearly 35% from a year ago.

Dealers have a significant opportunity to make sales and ensure EVs aren’t sitting on the lot by embracing the electric vehicle market and positioning themselves as EV experts. This includes:

Investing in EV charging infrastructure, making their dealership a destination for EV owners
Training sales staff on EV technology and benefits to help engage and inform customers
Developing targeted marketing campaigns for EV buyers or prospective EV buyers, including tailored messaging and available incentives

Leveraging Data to Create Value

Dealerships can combat rising prices with data-driven strategies that offer personalized incentives and financing solutions, appealing to budget-minded buyers.

According to S&P Global Mobility, the average advertised discount of U.S. inventory reached $3,149 at the end of May, representing a 6.2% discount off MSRP. Full-size half-ton pickups had the highest average advertised discount around $4,750, while compact cars had the lowest just under $1,400.

Focusing on value and affordability above all else, dealerships can appeal to a broader audience and maintain sales momentum, even in a high-cost environment.

Proactively Building Customer Loyalty

Exceptional customer experiences and proactive engagement are crucial for maintaining customer loyalty in a market with increasing competition. By proactively engaging loyalty customers before they return to market, dealers can foster stronger relationships with customers throughout their entire ownership journey and stay top-of-mind with buyers.

At the same time, declining brand loyalty presents a unique opportunity for dealers to conquest new customers from the competition. By leveraging targeted, personalized communications, showcasing the value proposition of their brand and offering competitive incentives, dealerships can win over customers who may be open to exploring new options.

For example, by identifying service-not-sold leads through their service appointments, dealerships can identify, pre-qualify and prioritize potential conquest customers. With these insights, they can develop campaigns that address the specific needs and preferences of these individuals, making their messaging more relevant and engaging.

By understanding and anticipating the needs of both loyal and prospective customers, dealerships can create a more personalized and engaging experience that drives brand loyalty and sales growth.

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The evolving automotive retail landscape presents both challenges and opportunities. With an increasing number of nameplates, advertising channels and customer touchpoints, it’s crucial for dealers to adopt a targeted approach. Leveraging predictive marketing and data analytics helps dealerships identify high-potential leads, tailor messaging and optimize ad spend, making their marketing efforts more efficient and effective.

By embracing change, leveraging technology and focusing on customer needs, dealerships can not only survive but also grow their brand share in this dynamic market.

Want to learn how Mastermind can help unlock the full potential of your dealership? Request a demo.