7 Best Dealership Practices to Navigate An Uncertain Market


The unprecedented COVID-19 pandemic has disrupted the global economy. Nearly every industry was negatively impacted by the pandemic to some degree, but experts believe that the automotive industry was among the hardest hit. 

Most automotive dealerships have reopened after months of lockdowns and stay-at-home orders, but that does not mean that everything has returned to business as usual. There’s no question that COVID-19 has created a new market environment for the automotive industry

Dealerships must be willing to adapt to these changes in order to stay competitive. Here are some best practices that dealerships should follow during this period of uncertainty:

Analyze Local Market Trends

The pandemic has impacted the entire country. But the way in which the pandemic has impacted people varies from location to location. For this reason, it would not be wise to consider national market trends when determining what strategies to use to grow your dealership. Instead, it is best to rely on local market trends for your community.

For example, Experian recently released its U.S.A. Automotive Wellbeing Index for different regions of the country. According to this report, the automotive industry is suffering the most in the Midwestern states. However, the automotive industry is faring much better in Northeastern and Western states, especially among urban and suburban consumers. 

This report also reveals that urban and suburban consumers who are interested in purchasing a new vehicle are now considering reducing their budget. Information like this is invaluable, so use it to guide your marketing strategies during this uncertain time.

Focus On Other Business Areas

Automotive dealerships typically focus their resources on one area of business: new car sales. But in these uncertain times, it’s important to widen your focus to other business areas as well.

For example, consumers may be hesitant to purchase a new vehicle if they are worried about their finances or job stability. These consumers may not be willing to purchase a new vehicle, but they will still need to get their current vehicle serviced. Targeting consumers with these service needs could help your dealership thrive during this uncertain time.

According to Google, consumers who are in need of maintenance or repairs typically turn to search engines for help. Google reports that one-quarter of all automotive searches are related to parts, maintenance, or repairs

More than 50% of these searches are performed on mobile devices. Furthermore, more than half of the consumers who perform these mobile searches for parts, maintenance, or repairs end up calling an automotive company directly from the search results.

This data highlights the importance of mobile optimization for automotive dealerships. Optimize your website for mobile devices to ensure you can attract as many of these potential customers as possible to fulfill their service needs. It is not as lucrative as selling new vehicles, but focusing on this area of business could help your business remain profitable in this unusual market.

7 Best Dealership Practices

Help Consumers Conduct Research

Many automotive dealerships are looking for ways to cut costs to offset the impact of declining sales. This is a smart strategy to survive these economic times. But one area where you should not cut costs is vehicle history reports.

Purchasing a vehicle is a significant financial investment, so consumers typically conduct a lot of research before deciding which one to buy. They conduct this research to make sure that they are investing in a reliable, fairly priced vehicle. Instead of letting consumers conduct this research on their own, provide them with the information they need by including vehicle history reports in online listings

A vehicle history report contains important information such as the accident history, mileage, and overall condition of the vehicle. Including this report in your online listings will make it easier for consumers to find the information they need to make a purchase decision. It will also show these consumers that you are committed to transparency, which can establish trust with your customers. 

Purchasing vehicle history reports may cost money, but it is certainly worth the expense.

Take Your Buying Stages Online

The way that consumers shop for vehicles has changed. Most of today’s consumers are comfortable with purchasing a vehicle online rather than in a dealership. To attract these consumers, consider moving as many steps of the purchase buying process online as possible.

For instance, create an online listing for each vehicle in your inventory. Use professional, high resolution car photos and videos. Be sure to post photos and videos of both the interior and exterior of the vehicle. Provide detailed information in the listing so consumers can easily compare vehicles to narrow down their options. 

You should also consider investing in technology to create a virtual test drive experience for consumers. This way, consumers can see what it’s like to sit behind the wheel of a vehicle without stepping foot in your dealership. If this isn’t possible, at least allow consumers to schedule their test drive online to make it as convenient as possible.  

Make sure customers who are shopping online can reach you to ask questions. For instance, add a live chat feature to your website so customers can chat with a representative while they shop. Or you could also allow customers to schedule free phone or video consultations with a member of your team.

Making these changes will help you win over the many customers who want to shop for a vehicle from the comfort of their own home.

Take Advantage of Free Marketing Channels

Automotive sales have slowed as a result of the coronavirus pandemic, so now is not the time to splurge on pricey marketing campaigns. 

But reducing your marketing budget does not mean giving up on marketing altogether. It simply means you should shift your focus from paid channels such as billboards, print, and TV to free channels such as social media, your website, and SEO.

Use your phone to take photos or film videos of the vehicles in your inventory. Share these photos and videos on your social media channels, including Facebook, Instagram, Twitter, and YouTube. You can also promote special discounts and deals, answer customers’ questions, and advertise repair and maintenance services on these free channels.

Take the time to create a Google My Business page if you haven’t done so already. Make sure the information you enter on this page is accurate, especially your phone number, location, and business hours. Add photos of your dealership to your page, too. 

The more information you add, the better. Keeping this page updated will increase your chances of showing up in local search results, which will help you attract customers who are located nearby.

7 Best Dealership Practices

Communicate Clearly

Lockdowns, stay-at-home orders, and other restrictions are imposed at the local level. These restrictions are constantly changing, which is why it’s important now more than ever before to clearly communicate with your target audience. 

Make sure you inform your target audience of any changes to your business operations. For example, tell your target audience if you are limiting the number of people who are allowed in the showroom at once. You should also inform your target audience of changes to your operating hours, rules regarding face coverings, and service interruptions. 

Tell your customers how you plan on keeping them safe while they visit your dealership. Explain what measures you are taking to prevent the spread of COVID-19 at your dealership.

If you are offering new services as a result of COVID-19, now is the time to communicate these changes as well. For instance, many dealerships are now delivering vehicles to customers’ homes for test drives. If you are offering this service, make sure your target audience is aware so they can take advantage of it. 

Don’t forget to clearly communicate this information to your staff, too. Try to schedule meetings with the entire staff on a regular basis to check in, address concerns, and communicate changes that will affect business operations. This ensures that everyone on your team is on the same page.

Target New Types of Automotive Consumers

During this time of uncertainty, dealerships should be willing to rethink and redefine their target audience. This is because a new type of automotive consumer has emerged as a result of the global pandemic.

In the past, many people in urban areas relied solely on public transportation to get around town. But now, the vast majority of people in these areas are avoiding public transportation due to the risk of catching coronavirus. Because they can no longer rely on public transportation, these consumers are now considering buying cars for the first time.

It’s estimated that more than 3 million people in the U.S. who don’t have a car are now considering buying one due to the pandemic. Targeting this group of consumers is a big opportunity for automotive dealerships who are eager to attract new customers.

Dealerships should remember that these consumers are not “car people,” which means they have very limited knowledge about cars in general and the process of purchasing a vehicle. 

To win these consumers over, dealerships should focus on providing them with as much information as possible and guiding them through the entire process of purchasing a vehicle. Dealers should also adjust their messaging so it resonates with these consumers. For example, make it clear that your dealership understands the reasons why these buyers are motivated to purchase a vehicle for the first time. It is too early to determine the long-term effects of the global pandemic on the automotive industry. Although the future is uncertain, the automotive industry is resilient. It is possible for dealers to make it through this difficult time as long as they rely on the right business strategies.

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