By Desiree Homer
The used car market is like the wild, wild, west these days. Experts are offering varying pricing predictions, and dealers are purging their aged units. New inventory shortages are forcing buyers to consider preowned vehicles. Rental car industries are flooding the auctions with fleet reductions. But despite the used inventory challenges, some dealers are finding tremendous opportunities for sales and growth. In Episode 64 of our Dealer News Today podcast series, Dave and Andy sit down with Stephen Wade, the founder of Stephen Wade Auto Center in Utah. Wade shares his insights to success as he’s managed to turn a crisis into profits. He’s capitalized in a way that he says is providing his best year ever.
AutoNation has also announced a recent growth plan that includes opening strategies of used-only stores. The retail giant recognizes the volatility of the used market presents new opportunities. And new nationwide stores, dedicated to preowned inventory, may be an innovative channel to make the most of the pandemic-altered market.
The AutoNation Plan for Growth & Expansion
AutoNation Inc. announced last week that it’s ready to invest up to $220 million into plans to build new retail stores. The officials suggest there will be at least 20 locations erected over the next three years. But uniquely, these stores will focus exclusively on used and preowned inventory only. The company’s original plan started modestly, with the opening of only five pilot stores first. The idea then would be to wait and see how business would go before then identifying a “clear path to profitability.” In today’s pandemic conditions, it’s evident the company has recognized the used market is the way to expand successfully.
Better Tools & Streamlined Efficiencies
Part of AutoNation’s success lies within its careful consideration of growth plans. The company also focuses on reduced expenses and streamlined efficiencies, including a robust suite of digital tools, ideal for conducting business in a social-distancing environment. April hit the group hard, like most dealers, but it’s these efforts that have helped it sustain a more than double net income of $279.8 million from last year’s $100.8 million. It’s clear that AutoNation is primed for growth as its shares closed last Thursday, up 7.6%.
A Winning Recipe for Growth
This latest announcement from AutoNation, along with the insights offered by industry veteran, Stephen Wade, reminds dealers that finding the winning recipe for growth during a pandemic is possible. Dealers should be considering how to identify and leverage those used vehicle channels for revenue. It’s also a good idea to focus on streamlining internal processes and efficiencies. Look for ways to sell more, but also find ways to cut costs. Digital solutions continue to improve, and many dealers are looking to their software vendors for innovative tools to help sell, price, and acquire vehicles. Finding your winning recipe will mean keeping in touch with your local market demands, pandemic conditions, and available resources.
Despite the government-imposed shutdowns, many dealers and auto groups are finding ways not only to survive but also to thrive in today’s economic state. As you carve out your path to success and navigate the challenges in your local market, get creative, and lead with those efforts that offer the most significant ROI.