CBT Automotive Network Podcast

Today's headlines include:

- Labor Day weekend is quickly approaching, and many car shoppers are expected to be on the hunt for their next vehicle

- Ford Motor Company has completed its production of ventilators

- Tesla expects to see a record rise as shares soar

Visit CBTNews.com to watch the full interview with Dale Pollak and to check out all of today's top stories.

https://www.cbtnews.com/cbt-automotive-newscast-september-2-2020/

As always, please remember to share your thoughts, comments, or questions.

On this week’s episode of the CBT News Market Update, new car sales came out to a retail SAAR of 11.16, down 12.6% from 13.39 in 2019. The inventory of new vehicles sold took a 29.6% drop from this time last year. Used-car sales also dropped below 2019 numbers for the first time since April. Sales came in at 149,050, a 21.5% decrease from last year’s number of 189,766. New car inventory is still struggling, down 19.5% from last year, but we do see about a 1% improvement week over week. Used inventory is up slightly by 7.1%.

Here to break down how these numbers reflect larger industry trends is Lance Shafer, General Manager of Product and Technology at LotLinx, and Bob Lanham, Head of Automotive Retail for Facebook. The pair tackle how dealers’ overall paid digital ad spend has increased to pre-COVID levels.

https://www.cbtnews.com/cbt-news-market-update-bob-lanham-facebook-lance-schafer-lotlinx/

Retail automotive trends are constantly shifting so it’s important to stay up-to-date with the latest information and data so you don’t miss out on any opportunities. Joining us with the latest Cox Automotive COVID-19 Impact Study is David Foutz, Vice President of Sales at Xtime. We’re discussing the study’s data and its implications on dealership service departments.

The glaring issue that was found in the impact study was the logistics surrounding service pickup and delivery demand. Not only are these services gaining traction with consumers during the COVID-19 pandemic, but customers are also willing to pay for the added convenience. This signals a new potential revenue stream for dealerships. On the flip-side, for dealers who don’t offer service pickup and delivery, this could be a missed opportunity.

Cox Automotive data shows that 22% of vehicle owners have used service pickup and delivery since COVID-19, and about 90% of users were satisfied with their experience. In fact, 48% of vehicle owners are likely to pay upwards of $20 for this service.

However, around 80% of dealers aren’t even charging for the service. In addition to added revenues, service pickup and delivery have shown to increase service customer retention. 69% of consumers are likely to choose a dealership over another based on the availability of these services.

https://www.cbtnews.com/is-your-dealership-charging-for-service-pickup-and-delivery/

Many auto retail professionals are wondering how to successfully thrive and recover from the pandemic that we face. Several new and innovative changes have been made nationwide in dealerships and digital retailing seems to be the way of the future. Here to talk more about those changes and how to improve your profit is Pete MacInnis, Founder and CEO of eLEND Solutions.

In this segment, Jim and Pete first discuss how the COVID-19 pandemic has forced the acceleration of process changes, like digital retailing, for automotive dealers. In Pete’s 40-year career, this has been unprecedented. However, he is not very surprised by it. Pete believes that crises like these are blessings in disguise. Dealers tend to become more efficient, more profitable, and provide consumers with better customer experiences.

From Pete’s perspective, consumers are driving these process changes. The boost we are seeing digital retailing is a consequence of that. The heightened presence of digital retailing also signals to customers that long-term process changes are coming. At this stage of digital retailing maturity, Pete believes that it still has a long way to go.

At the end of the day, consumers want a better car buying experience. Dealers then need to align their processes with consumers’ desires. While great strides have been made, certain areas are still falling short. Sales and finance have been working in tandem in store for decades. Digital retailing will never reach its full potential without the digital finance component.

Pete MacInnis brings 40 years of experience in automotive finance and technology to the industry. He began his career with WFS Financial where he spent 14 years in various management positions. He then co-founded the auto finance company Onyx Acceptance in 1993. Onyx originated over $14 billion in auto loans, went public in 1996, and was acquired by Capital One in 2005. In 2003, Pete founded DealerCentric, known today as eLEND Solutions, one of the industry’s leading FinTech companies.

https://www.cbtnews.com/elend-solutions-ceo-pete-macinnis-on-aligning-digital-retailing-with-consumer-demand/

In the midst of racial injustice and suffering throughout the United States, businesses are turning their focus toward diversity and inclusion. Several retail automotive groups are taking a stand and amplifying their voices to spark change. Jenell Ross, President of Bob Ross Auto Group joined us to talk about her unique position as the only African-American woman to own a Mercedes-Benz and Buick GMC dealership.

In this segment, Jim and Jenell first discuss her career journey in the automotive industry. At the young age of 27, Jenell assumed her role as the leader of the Bob Ross Auto Group after her father passed unexpectedly. Carrying on his legacy has been a challenging but rewarding process.

In light of the racial inequities that still happen on a daily basis in the United States, minority representation, especially African-American representation, is at the forefront of every industry, and automotive retail is no exception. In Jenell’s words, the lack of black-owned dealerships in this country is very unfortunate. However, in order to create more opportunities for African-Americans in the industry, Jenell believes that it begins with education.

When it comes to the buying power of African-Americans, there needs to be more of a conscious effort to bring this population into the industry. Jenell has made it a point to go into the schools and start dialogues early with young people about the opportunities on the retail side of the business. Education for consumers is important as well. If consumers have a better understanding of who they are actually buying from, then their shopping choices might look very different.

“There needs to be more of a concentrated effort to diversify on all levels within automotive. From the OEM perspective, from the suppliers’ perspective as well as the dealer body,” says Jenell. “We need to be made up of what American looks like, and it’s a very diverse country. And there is a lot of buying power from minorities buying vehicles.”

Bob Ross Auto Group has been serving the greater Dayton, Ohio community for over 43 years. In 1974 Bob Ross Sr. was chosen to participate in General Motors’ first Minority Dealer Academy where he was the first graduate to be approved as an automobile dealer. Ultimately, Bob became the African-American Owned Mercedes-Benz dealer in the world. After his untimely passing in 1997, Jenell took over the dealer group and guided the dealerships into the future. Jenell is also a former chairwoman of the AIADA.

https://www.cbtnews.com/oh-dealer-jenell-ross-on-creating-more-opportunities-for-african-americans-in-the-retail-auto-industry/

If your dealership is not using Facebook as part of its marketing strategy, then it should be. The social media platform has become more than just a place to catch up with old friends. It is now a powerhouse of advertising tools and resources. Paul Potratz, Owner of Potratz Partners Advertising joins us to discuss Facebook and how to best use it for your business.

From Paul’s perspective, dealerships that have not seen the ROIs they expected from Facebook advertising are likely taking the wrong approach. Many businesses advertise on Facebook the same way they would advertise on radio or TV; by just making announcements. Facebook is designed to create conversations. By giving consumers to option to message your dealership directly through Facebook, you have opened a unique line of communication.

To entice more consumers to start a dialogue through Facebook, the messaging behind the ad’s call to action has to be correct. Paul recommends avoiding the mention of a specific car or a specific price. Talk in general terms and paint a visual picture for the customer.

Once the customer starts that dialogue, make sure to have the staff infrastructure in place to field and respond to those messages. Responses don’t necessarily need to be instantaneous, but once the conversation has begun, so has the sale.

https://www.cbtnews.com/paul-potratz-on-creating-the-right-messaging-behind-your-facebook-ads/

According to Cox Automotive’s COVID-19 Consumer and Dealer Impact Study, there are fewer new-car shoppers currently in the market for a vehicle. Since the total available market is smaller than usual, dealers need to strategize smarter than ever for their share. To make matters more challenging, dealers are also facing rising prices and low inventory levels. However, they can still stand out from their competition and attract customers by delivering an experience that not only meets individual needs but also anticipates them. AI technology can help give dealers this extra edge. Here to discuss how AI can help dealer recovery efforts further, is Chase Abbott, Vice President of Sales at VinSolutions and Dealer.com (Cox Automotive).

AI technology can process huge volumes of readily available customer data online to make accurate predictions instantly. AI allows dealers to pinpoint whether customers are ready to buy a new vehicle and even what make and model they are looking for. Having this information in seconds can help dealers better meet customer needs and drive more sales.

The statistics speak for themselves. According to VinSolutions Automotive Intelligence Dashboard, consumers classified as ‘ready to buy’ are nearly 10.8 times more likely to make a purchase within 30 days, than consumers without data indicators. The brand, consumers ultimately select, is also correctly predicted for 84% of sales and the model is predicted correctly 46% of the time.

Some other AI technology tools and insights dealers can take advantage of right now are the number of customers who repeatedly return to the dealership website and sentiment analysis. Sentiment analysis tracks how consumers respond to targeted messaging. These data points are crucial for dealers to speed up their sales recovery.

https://www.cbtnews.com/how-ai-technology-can-help-dealers-boost-sales-recovery/

Joining us today to give a full recap on retail automotive trends and what dealers need to know is Steve Finlay, senior editor at WardsAuto. For a number of years, automotive digital retailing has been a topic of conversation, but the COVID-19 pandemic kicked it into high gear. Steve wonders if the surge of online transactions and home delivery will stick, or if many dealers will revert back to their usual practices.

While many consumers would still rather do their shopping online, the flip-side for dealers is that building the infrastructure to facilitate online transactions can be expensive. Steve asks – Can smaller dealers really afford this? However, digital retailing allows consumers to do most of the heavy lifting, while dealers can spend less on marketing and other expenses.

Inventory also continues to be a challenge for dealers nationwide. Domestic OEMs have considerably reduced the manufacturing of their sedan models. This is due to the high demand for trucks and SUVs among consumers. Brand loyalty is also not what it used to be according to Steve. Despite these challenges, Steve believes that the auto industry is resilient and pre-COVID sales levels are expected to return in 2022-2023.

In addition to being the senior editor at WardsAuto, Steve Finlay is also the editor of WardsAuto Dealer Business Magazine. As such, he covers automobile dealers, OEMs, and retail practices. His career in journalism started 42 years ago as a crime reporter. For the last 23 years, he has followed the automotive retail industry, and continues to write informative and engaging stories.

https://www.cbtnews.com/wardsauto-editor-steve-finlay-on-digital-retailing-inventory-struggles-and-more/

As part of our ongoing Coronavirus coverage, we’re pleased to welcome back President of WeDrive Automotive, Eric Mercado. In this segment, Jim and Eric discuss dealership marketing spend during the COVID-19 outbreak, and how marketing vendors can help dealerships pivot their messaging to clients.

https://www.cbtnews.com/what-message-should-dealers-be-sending-to-their-clients-eric-mercado-wedrive/

As part of our ongoing Coronavirus coverage, we’re pleased to welcome Joe Overby, Senior Editor for Auto Remarketing and Auto Remarketing Canada. In this segment, Joe and Jim discuss how COVID-19 has disrupted the auction business and used car market. They also tackle the outlook for the used-car market for the remainder of 2020.

https://www.cbtnews.com/how-the-coronavirus-has-disrupted-the-auction-business-and-used-car-market-joe-overby-auto-remarketing/