brian finkelmeyer -- dd26 presentation · back/flooring income ü future fixed ops income used car...

SPIN THE

FASTER!

Brian FinkelmeyerSenior Director, [email protected]

Monthly Payment

Download our mobile app to rate this session!(Search “Digital Dealer” in the mobile app store)

Growing affordabil ity concerns

$365 $400 $411

$446 $464

$536

$0

$100

$200

$300

$400

$500

$600

Q3 2013 Q3 2018

Used Lease NewS o u r c e : E d m u n d s

Rising Interest Rates


Rising Competit ion from Used Cars


Retail Contraction in the New Car Market


800,000 Fewer New Cars will be Sold


Q1: How would you describe

the current market for vehicles

in the areas where you

operate?

Franch ise

Dea le rs

59

Q3‘18

54

Q4‘1751Q4‘18

How can Dealers overcome these headwinds in 2019?


Three Keys to New Car Success


Managing Inventory Like an

InvestorAccelerating the

Wheel of FortuneDigital Marketing

Expertise

Your Content Goes Here


MANAGE YOUR INVENTORY LIKE AN INVESTOR NOT A SPECULATOR.

Berkshire Hathaway Winners and Losers


Berkshire Holdings 52 Week Performance

Wells Fargo -7.9%

Apple 38%

Bank of America -4.4%

Coca-Cola -1%

American Express 5.8%

Phillips 66 9.1%

Southwest Airlines -10%

Goldman Sachs -12%

General Motors -28%

Which ones are your winners & losers?


Vehicle Color Overall Like Mine Variance Competitive Set Size2018 Ford F-150 Lariat White 130 107 23 272018 Ford F-150 XLT Oxford White 130 124 6 1102018 Ford Explorer Sport Magnetic 72 48 24 102018 Ford F-150 Lariat Oxford White 130 160 -30 312018 Lincoln Navigator Reserve White Platinum 35 51 -16 72018 Ford Edge SEL Oxford White 161 174 -13 592018 Ford Escape SEL Ruby Red 75 315 -240 762018 Ford Explorer XLT Blue Metallic 72 62 10 502018 Ford Edge SEL White Platinum 161 174 -13 592018 Ford Edge Titanium Blue Metallic 161 122 39 192018 Ford Edge SEL Ruby Red 161 195 -34 242018 Ford Edge Titanium Blue Metallic 161 122 39 19

?

Some inventory assets have bigger potential than others


Vehicle Color Overall Like Mine Variance Competitive Set Size2018 Ford F-150 Lariat White 130 107 23 272018 Ford F-150 XLT Oxford White 130 124 6 1102018 Ford Explorer Sport Magnetic 72 48 24 102018 Ford F-150 Lariat Oxford White 130 160 -30 312018 Lincoln Navigator Reserve White Platinum 35 51 -16 72018 Ford Edge SEL Oxford White 161 174 -13 592018 Ford Escape SEL Ruby Red 75 315 -240 762018 Ford Explorer XLT Blue Metallic 72 62 10 502018 Ford Edge SEL White Platinum 161 174 -13 592018 Ford Edge Titanium Blue Metallic 161 122 39 192018 Ford Edge SEL Ruby Red 161 195 -34 242018 Ford Edge Titanium Blue Metallic 161 122 39 19

Focus on Frozen Capital


105%

14%

Frozen capital is cool ing profits!


$170,000 Swing

Requires: $8.5M in Additional Sales at 2% ROS

OR

300 Additional Sales

Team Toyota Investment Focus


227

4024

9 415

20

50

100

150

200

250

0-30 31-49 50-75 76-90 91-120 121-180 181+

Age

5% Aged


SPIN THE

FASTER!

New car sales are the ignit ion switch


Obtain Trade

F&I

OEM Bonus Money

Grow Units in Operation

New Car Sale

1.

3.

4.

5.

2.

Customer Perception is Reality



Importance of Trades

Trade In Vehicles

Auction Vehicles


Vehicle Age CostKBB.com Trade

In Excellent

Price Variance vs. KBB Excellent

2017 Toyota Highlander LE 11 $25,333 $21,473 $3,8602016 Mercedes-Benz GLC 300 4MATIC® 11 $23,788 $19,277 $4,5112016 Toyota Corolla S Plus 11 $14,039 $11,484 $2,5551999 Plymouth Grand Voyager SE 11 $2,050 $530 $1,5202015 Toyota Corolla L 12 $11,169 $5,867 $5,3022015 Lexus CT 200h 13 $18,233 $15,040 $3,1932014 Toyota 4Runner SR5 14 $25,706 $22,265 $3,4412012 BMW 5 Series 535i 14 $16,496 $14,120 $2,3762007 Chevrolet TrailBlazer LS 14 $7,598 $3,166 $4,4322005 Toyota Highlander V6 14 $7,363 $3,020 $4,3432016 Ford F-150 XLT 15 $25,867 $21,298 $4,5692013 Toyota Avalon XLE Premium 15 $15,192 $11,573 $3,619

I wish I gave every customer

kbb excellent

I wish I gave every customer KBB Excellent


Negotiate theRecon Cost, Not the Condition

Carvana’s Transparent Trade Appraisal Process


Rethinking Our Comp Plans and Structure



Misalignment Between Compensation & Value Creation

New Car Deptü Factory Bonusesü Generate Tradesü Create Re-Conü Create F&I Ops.ü Hold-

back/Flooring Income

ü Future Fixed Ops Income

Used Car Deptü Used Car

Grossü Re-Conü F&I Ops.

F&I Deptü F&I Gross

Walser Automotive



Marketing: Do Less and Obsess


Average Dealer is making a lot of bets

42% of All Digital Ad Dollars in the US are spent on Google



Demand Capture

Own price based key words: 3-Series Lease Deal or X3 Lease Special


Lowered Price Needs Promotion

Loss Leader PPC ads drive Leads and Sales


DemandGeneration


Facebook Building Blocks

Retarget Your Website Traffic

Use Your CRM Data

Buy 3rd Party Audience

Great Examples


Promote Service Right Car,Right Buyer

Messenger

Closing Thoughts


Driving new car success in 2019


Reduce Ad Expense per vehicle with Digital Marketing Expertise

Align Structure and Comp Plans to Drive the Wheel of Fortune Faster

Improve Trade Appraisal Process

Manage Inventory like a Stock Portfolio

[email protected]

brian finkelmeyer -- dd26 presentation · back/flooring income ü future fixed ops income used car...

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