Brad Mugg on Supply and Demand with Supply Issues
Transcript
Sean :nLet’s talk about inventory, recently Honda made an announcement that they’re cutting production of new vehicles this summer by about 50%. So what’s your inventory situation been like? And how do you plan on adapting to that supply situation?n
nBrad :nYeah, you know, Honda doesn’t know really. Well, they might know. But most of them don’t know, because we’ve asked several people on what this looks like in the future. You know, where are we headed here? What’s going on? Bottom line is that this summer is going to be low on inventory. Big time! My inventory allocation was about a third less than it was prior month.n
nWhat are we going to do? We’re focused on used cars in a big, big way. You know, we have service drive sales going on, and we’re getting trades out of there. It’s interesting. We’re even selling customers in the service drive from getting their trade and their used car trade and selling them another used car. That’s happening more than I’ve ever seen it happen before. But it’s all about used cars for the summer. We’re focused on used cars. I mean, you know, we’re buying more used cars, doing everything we can to buy every single used car we can like everyone, right? Every dealership today says we want you to trade, we want your car right? But that’s what we’re focused on heavily on used cars..n
nSean : Yeah, that’s an important growth area right now. And you know, I have a dealer that actually in Nashville, we, we built a growth plan around, you know, the vehicle, the sales consultants are no longer sales consults now, their sales and purchasing consultants, and they actually have to part of their prospecting and part of their one of their boarding deals, right. It’s how many cars that they buy out of service or from other dealers, like these guys are actually prospecting to dealers who have their core inventory at a non core. So it’s been really effective. Sometimes they get 20 in a month, sometimes they get 30. But those cars are all selling. I mean, it’s pretty powerful stuff. Sounds like you’re really taking that same approach. What sort of tools or strategies are you using Brad to get your to get some inventory acquisitions out of service?n
nBrad : Well, we have 10 salespeople in the service drive to managers and that’s all they do is talk to every customer that goes to the drive. So we use the I mean, excuse me, we use Auto Alert as well. And my sales internet department, they are hammering, hammering that Autoalert big time just to get an appointment. And then instant cash offer we’re a buying center for KBB and we’re doing about 30 each 30 to 40 a month out of there. And then we just added a second person to that department hoping to get that numbern
nSean : increased. Man that’s huge, 100 deals and Honda dealers seems to do really well with the ICO and maybe it’s just a mindset thing. I’ve got a coach a Honda store in the East Coast that’s got a does very well with the ICO but I think you got to take one thing both you guys have in common, you have a dedicated person or people to that those find those cars, I’m guessing that Payplan I’m guessing they don’t sell cars, they generally speaking like you do a handoff if the customer wants to trade or do you or can they selln
nBrad : and then on the KBB program, they do a hand off Yeah. But obviously in the service drive, they take it from beginning to end. And we’re you know, we’re doing right at 100 cars a month in the service drive. But you’re right though, you’ve got to have dedicated people to it. You can’t say hey, salesperson, go there and shake some hands and it certainly never works. You know, you’ve got to have it designated for that.n
nSean : Awesome. Yeah, that focused approach. You can either do one thing at 100% or 100 things at 1%. Yeah, exactly. Focus goes a long way. Man. I’m trying to find something we disagree on. I’m very aligned. Love it.n
nBrad :nYeah, you know, Honda doesn’t know really. Well, they might know. But most of them don’t know, because we’ve asked several people on what this looks like in the future. You know, where are we headed here? What’s going on? Bottom line is that this summer is going to be low on inventory. Big time! My inventory allocation was about a third less than it was prior month.n
nWhat are we going to do? We’re focused on used cars in a big, big way. You know, we have service drive sales going on, and we’re getting trades out of there. It’s interesting. We’re even selling customers in the service drive from getting their trade and their used car trade and selling them another used car. That’s happening more than I’ve ever seen it happen before. But it’s all about used cars for the summer. We’re focused on used cars. I mean, you know, we’re buying more used cars, doing everything we can to buy every single used car we can like everyone, right? Every dealership today says we want you to trade, we want your car right? But that’s what we’re focused on heavily on used cars..n
nSean : Yeah, that’s an important growth area right now. And you know, I have a dealer that actually in Nashville, we, we built a growth plan around, you know, the vehicle, the sales consultants are no longer sales consults now, their sales and purchasing consultants, and they actually have to part of their prospecting and part of their one of their boarding deals, right. It’s how many cars that they buy out of service or from other dealers, like these guys are actually prospecting to dealers who have their core inventory at a non core. So it’s been really effective. Sometimes they get 20 in a month, sometimes they get 30. But those cars are all selling. I mean, it’s pretty powerful stuff. Sounds like you’re really taking that same approach. What sort of tools or strategies are you using Brad to get your to get some inventory acquisitions out of service?n
nBrad : Well, we have 10 salespeople in the service drive to managers and that’s all they do is talk to every customer that goes to the drive. So we use the I mean, excuse me, we use Auto Alert as well. And my sales internet department, they are hammering, hammering that Autoalert big time just to get an appointment. And then instant cash offer we’re a buying center for KBB and we’re doing about 30 each 30 to 40 a month out of there. And then we just added a second person to that department hoping to get that numbern
nSean : increased. Man that’s huge, 100 deals and Honda dealers seems to do really well with the ICO and maybe it’s just a mindset thing. I’ve got a coach a Honda store in the East Coast that’s got a does very well with the ICO but I think you got to take one thing both you guys have in common, you have a dedicated person or people to that those find those cars, I’m guessing that Payplan I’m guessing they don’t sell cars, they generally speaking like you do a handoff if the customer wants to trade or do you or can they selln
nBrad : and then on the KBB program, they do a hand off Yeah. But obviously in the service drive, they take it from beginning to end. And we’re you know, we’re doing right at 100 cars a month in the service drive. But you’re right though, you’ve got to have dedicated people to it. You can’t say hey, salesperson, go there and shake some hands and it certainly never works. You know, you’ve got to have it designated for that.n
nSean : Awesome. Yeah, that focused approach. You can either do one thing at 100% or 100 things at 1%. Yeah, exactly. Focus goes a long way. Man. I’m trying to find something we disagree on. I’m very aligned. Love it.n