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Chris Barrett, managing director of vAutoStock, explains why it is so important that dealers focus on turning over stock quickly
According to the latest 2024 outlook from the SMMT, the new car market is estimated to total overall volume of 1.974 million units. The first month of the year saw 142,876 new cars registered, an uplift of 10,882 units on January 2023, the best performance for the month since 2020 and the 18th consecutive month of growth.
The increase was driven entirely by the fleet market, which rose by 29.9%, while private retail uptake fell -15.8%. Fleets accounted for more than six in 10 (63.2%) new cars registered, up from just over half (52.7%) last year. What we can’t predict is if these are short cycle fleet registrations that will return quickly to the used vehicle market.
With new car volumes returning with increased RRPs, higher used vehicle prices are here to stay. What has also returned is the monthly book drop we are now seeing. This can cost dealers as much as 3% a month, which is a significant amount for some volume sites.
It is so important that dealers focus on turning over stock quickly, which is currently sitting at 31 days, on average. Most dealers are restricted on the number of hours available to them for mechanical and bodywork, so it is important to have a handle on preparation.
On average, there is a delay of two days before a vehicle is booked in for any work. Delays are often caused by waiting for parts that could have been pre-ordered, or a vehicle being held in one part of a preparation process whilst another person/department could be working on it.
Dealers can reduce the average speed to online significantly with the right processes in place. For example, some dealers have reported a drop from 11 days to six and check in and appraisal down to 48 hrs from when a vehicle lands. Having more stock to drive away the same day, can undoubtedly boost cashflow.
Below are some tips for dealers looking to improve their speed to market via faster preparation:
- Spend time with each person currently involved in the preparation process. Throughout the vehicle preparation process – staff often complete tasks they think are either legacy, or simply not required and a waste of time.
- Measure your preparation time. Set your target preparation time and introduce ongoing monitoring. Often dealers have no measure, or the measure set, does not correspond to the reality.
- Control the costs. The best performing businesses maintain a focus on the ‘costs’ of each vehicle.
- Understand the limitations of a department. If the bodyshop is full of stock vehicles, there is no point in buying more that require lots of bodywork – no matter the price.
- Only sell prepared cars. If vehicles are fully prepared before they are sold, this will save time for the sales team.
The vAutoStock platform can show dealers a clear reduced impact on the sales team in terms of time.
Chris Barrett is managing director of vAutoStock
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