Dealerships must be ready for Q3 2024 sales upswing

With higher volumes now rolling off production lines and a fall in the peak values of used vehicles, 2024 could see a price realignment across the automotive retail sector.

Wider vehicle availability may also combine with a second wave of pent-up consumer demand – with motorists having clung onto their cars for longer than usual given the general economic uncertainty, restricted choice, and higher purchasing costs.

As a result, I anticipate a rise in sales volumes in 2024, particularly from Q3 onwards.

There has already been a modest drop in the value of used cars – some of which have soared by 25% in three years, and it is forecast  prices will continue to fall, even outside the usual seasonal adjustments.

As used values continue to tumble, manufacturers will have to respond. We have already seen a trend towards significant cost cutting in the EV market, as demonstrated by Tesla – a decision prompted by greater choice and competition.

As Elon Musk said: “We have to make our cars more affordable so that people can buy them.”

There is much sense in this view, although a widespread price realignment will bring a great deal of pain to manufacturers. However, the spiralling cost of both new and used cars is unsustainable and can only ultimately choke demand.

However, a rise in the availability of vehicles will also lower residual values, which means manufacturers are likely to push back on any Tesla-inspired price reductions. Rather, they will  seek to maintain stability through other inducements, including 0% finance and servicing deals as well as the inclusion of added vehicle extras.

The SMMT is already predicting that overall market outlook in 2024 is more positive than previously anticipated, up 1% to 1.970 million units (a 4.4% increase compared with the 2023 outlook). However, as I’ve already said, the pace of sales could pick up significantly during the second half of the year.

For those dealerships wishing to take advantage of increased activity and improve the  turnover rate of those vehicles taking up valuable space on forecourts and in showrooms, they must act in two key areas.

  • Crafting efficient and streamlined sales processes to handle increased online enquiries as well as showroom footfall. Dealerships must invest in training its sales teams in providing a personalised and informed service, while at the same time integrating and updating customer relationship management tools to manage leads, track customer reactions and provide a timely response.
  • Optimising inventory management is also crucial. Dealers need an efficient progressor system to ensure the car preparation process means vehicles reach the forecourt as quickly as possible to increase profit margins.

Given the increased demand for MotorVise’s own extensive range of training courses, covering cars EVs, motorcycles and leisure vehicles, many dealerships already recognise the need for investment if they are to improve their share of the market and, along with it, profitability.

However, many dealers continue to have a less than focused approach to inventory management, not knowing at what stage of preparation their trade-ins are at or when they are expected on the forecourt.

To highlight the positive effect this can have, MotorVise highlights its own Vehicle Progressor system which, based on genuine dealership figures, has resulted in a 20% increase in gross profit, 30% reduction of stock days, and a 19% reduction of days to sold.

Adapting to an evolving retail landscape through strategic inventory management, a strong online presence and customer-centric focus is key to not only surviving but thriving in a dynamic market. Those who embrace innovation and prioritise the customer can expect to reap the rewards of the expected 2024 upswing.

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