The automotive supply chain is beginning to normalize

Issue:

Factory shut-downs during the Coronavirus pandemic created some serious supply chain disruptions, and a chance for dealerships leverage the laws of supply & demand to drive strong profit margins (see this article from Forbes). However, a story from Reuters lauds manufacturers for the measures they took during those shut-downs to make their factories safer in the Covid era (distancing, masks, plexiglass, temperature checks, liberal sick leave policies). That has put "supply" in a position to begin catching up with "demand." And there is reason to believe the supply chain will be well protected, going forward: Ford has announced they are buying 12 super coolers so they can self-manage a vaccine supply for their workforce. (Talk about taking matters into your own hands!) The coolers will keep the Pfizer vaccine stored at the required 90 degrees below zero, according to this article from Automotive News.

Opportunity/Idea:

Once inventory is more abundant on more car lots, things are bound to become more competitive. Dealerships will again have to focus on driving traffic and creating demand. You have the on-air and online assets to accomplish that. And if unemployment remains high, finding qualified buyers may be more of a challenge… so keep your Marshall, Scarborough, and CMG Custom Research assets handy.

Ways you might use this issue to gain an appointment:

  • An email might begin with, "There is reason to believe that inventories will become more abundant in the coming weeks and months, which is likely to create a more competitive landscape for automotive once again (I'm basing that on these stories from Reuters and Automotive News about the measures manufacturers are taking to keep their operations moving). We would be wise to consider some ideas now that prepare us to win in that more competitive climate."

Using this issue in a Needs Analysis:

  • Industry experts suggest that the supply chain is normalizing since the summer surge when they had to sporadically shut down some factories. Are you having an easier time getting your hands on inventory, yet? And what are you hearing about inventory availability for some of your competitors?
  • Pandemic-related product shortages in the U.S. have begun to normalize, or at least they should, sometime soon according to the sources I follow. But there is still some concern for vehicles and parts that come from outside the U.S. (this story from the Detroit Free Press cites challenges for GM trucks, specifically). Does inventory continue to be a challenge for you, and how do you move a customer toward a more readily-available option even though that may not be what they came in looking for?

Sources:

https://www.forbes.com/sites/jimhenry/2020/10/31/car-dealers-enjoy-record-profits-while-new-car-shortage-lasts/?sh=3045a40d164f

https://www.reuters.com/article/health-coronavirus-autos-factories/detroit-automakers-keep-masks-on-to-keep-the-factories-running-idUSKBN27C217

https://www.autonews.com/manufacturing/ford-orders-12-ultra-cold-freezers-distribute-covid-19-vaccines

https://www.freep.com/story/money/cars/general-motors/2020/11/18/covid-19-gm-pickup-suv-plants-parts/6327402002/

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