Unlike many industries, the automotive world has come through the challenges of the past eighteen months fighting, with profits already on the rise. However, as parts shortages cripple even large-scale new vehicle manufacturers like Toyota, the industry, in general, is taking a surprising turn towards the second hand. In fact, with second-hand vehicle markets single-handedly thought to be driving inflation across the US, and with market prices up by an astounding 50% in this area, anyone looking to break into the automotive field right now could benefit from planting their roots here.
However, before you jump into purchasing a retail space and stocking it with second cars, it’s crucial to note that growth in this area has somewhat changed the way that second dealers operate. In fact, with used car sales largely outstripping even new manufacturing interest at least for the moment, success here is dependent on your ability to move with these changing tides. Most notably, dealers who have operated on questionable supply chains of one or more business connections now need to think about whether or not more famously wide scale automotive supply chains should get a look in here.
Certainly, new businesses on the block looking to differentiate what they’re doing may well benefit from implementing much larger supply chain networks on the ground. Here, we’re going to consider just a few of the reasons why that’s the case.
High demand requires wider-scale purchases
In the past, second-hand vehicle markets have largely operated on a trickle of purchases, either facilitated by one or two reliable sellers or even fueled from customer trade-ins. Now, however, with more consumers looking to buy used than new, many dealers are finding themselves backed into a corner, with some having to cold call prospects or place ads just to ensure enough vehicles to keep up with demand.
This is perhaps the first reason that supply chain management should now be considered in the secondhand market, with regular trade partners offering far more reliability when it comes to used vehicle delivery. Certainly, trade-ins continue to be a lucrative option here but should run alongside purchase from perhaps wider scale second-hand dealerships, or even old manufacturing warehouses. By coming to reliable trade agreements in this way, second-hand dealers will be far better able to provide the supply and demand that keeps their consumers happy when all of their competitors are failing to do the same.
Quality expectations drive the need for new parts
A shift towards far more expansive used car sales has also had an impact on quality expectations across the industry. Used cars that are selling for more than new models in some cases especially require extensive quality assurances, including maintenance and new parts as necessary. While used car dealers post-boom may have been able to handle these things themselves by taking the time to purchase Ford shop repair manuals etc. or hire professionals on the ground, faster turnovers and increased intakes now threaten to leave these self-led efforts in the lurch. Instead, dealers could benefit from embarking on repair-led supply chains, that especially facilitate the simplified exchange of new parts, and higher quality select vehicles in the first place.
Second-hand sales are now a global affair
The automotive industry is no stranger to global trade, hence why traditional supply chains in this field have long been some of the most globally complex in the world. Now, as second-hand sales that were once relatively location-specific more increasingly move online, even second-hand dealerships could benefit from considering how to extend their reach. Onboarding global supply partners can especially help to facilitate the simplified flow of parts and more efficient deliveries to customers from all corners of the world.
Furthermore, the already high demand that’s rising ever-faster due to global demand will be far easier for dealers to keep up with if they have global supply networks behind them. Certainly, faster turnovers, more efficient delivery timeframes, and simplified processes on the ground, can all help to keep dealers as competitive and viable options for even consumers who have to pay above the odds for overseas vehicle delivery in the first place.
Competitive advantage requires responsive purchase
Used car dealers looking to continue elevating consumer satisfaction also need to utilize responsive purchases that, far from requiring targeted interest, can ensure organic leads that are more likely to convert. Certainly, the ability to order vehicles on request from extensive supply networks most likely to hold relevant models will surely further boost interest, profitability, and success. Obviously, no dealership will be able to promise all vehicles all of the time, but global access to reliable supply partners who are equally entwined in their own supply networks significantly enhances the opportunity to meet demand with results.
Certainly from an online perspective, offering the widest possible database of on-demand vehicles can significantly boost even global interest, though obviously, you’ll need to deliver on those promises to ensure ongoing reputational benefits. The right partners, processes, and supply chains in the first place can certainly help to see you stealing the top spot of an already soaring market.
A final word
Breaking into a booming market can be as daunting as it is exciting, offering both the potential for extensive profits and throwing you into a competitive rat race before you can enjoy the spoils. While it may not be able to ensure that you pique all competitors to the post, implementing supply chains within second-hand focuses that have never needed them more can certainly help to provide the edge necessary to succeed. You could even go as far as to develop supplier networks that incorporate your closest competitors, providing you with an in-point to their processes, and ensuring that you champion each other for the mutually beneficial returns made possible by doing so. Either way, realizing that no car dealership is an island at a time when the ocean just keeps on getting deeper is imperative for the upfront success, and ongoing innovations, that have likely got you considering second-hand sales in the first place.