It has been doubted that reaching the goal of zero emissions by 2035 in the transport sector is feasible. Modera’s CEO Raido Toonekurg weighed in on the matter, stating that the worry of the politicians is based on European car manufacturers’ inability to keep up with the Chinese manufacturers. 

The European Union has set an objective to ban the registration of new cars with internal combustion engines by 2035. As much as it’s an ambitious plan, it seems doable. The only question is — at what price? 

The current state of the car market shows that Tesla along with various Chinese car brands has become a force to be reckoned with.  Within the last few years, Chinese car manufacturers have shown a strong growth outside of their home market, which has gotten both European car manufacturers and state leaders on their tip toes. Their fear is justified, as Chinese manufacturers are ahead of Europe both technologically and in terms of pricing. Their cheaper price is a result of a cheaper production environment as compared to Europe. 

Car market statistics reflect consumers’ preferences and it’s clear that electric vehicles are here to stay. Last year, 14.6% of all new cars registered in the European Union were electric. This was a huge milestone for electric vehicles, as they finally surpassed diesel cars, which made up 13.6% of registrations. The trend also shows that people who have gone the electric vehicle route, are not coming back to cars with internal combustion engines. 

Consumers can’t keep up with EU’s expected pace 

Unfortunately, the purchasing pace is still not as fast as the EU had hoped. This is also clear from Germany’s expected decrease in the interest for EVs. Thus far, Europe’s biggest car market has been a brilliant example of welcoming electric vehicles, however, it is predicted that this year, for the first time, there will be a 14% drop in EV sales compared to last year. Inflation, high car prices and insufficient charging infrastructure are to be blamed for the expected decrease.

For a long time, car manufacturers have tried to convince politicians that it is imperative to give a reasonable timeframe for the transition from internal combustion engine cars to EVs and it seems their pleas are finally being heard. The automotive industry is directly linked to the economy of Europe’s leading countries. This means that if production decreases then taxes resulting from car production as well as labor taxes will decrease drastically. Current statistics show that consumers are also not running to get electric vehicles, despite the looming ban. This step will only be taken once consumers have truly sold themselves on the idea. There’s no denying that the regulation to ban the registration of new internal combustion engine cars by 2035 has helped a lot in explaining the opportunities and concerns regarding EVs to the public. What is more, it’s made people seriously consider buying an EV and forced car manufacturers to rethink their approach. At the same time, it is obvious that the public’s interest and the abilities of car manufacturers are not aligned with the expectations of the politicians. This means that the EU must introduce a level of flexibility to their plans and not turn the idea of banning internal combustion engine cars by 2035 into an obsession. 

The post As European Car Manufacturers Fail to Keep up with Chinese Manufacturers, the EU Is Forced to Change Plans appeared first on Modera.

Selling vehicles has now become tougher than ever! Not only has the competition intensified, but the Covid-19 pandemic has totally changed buying behavior of customers. It is imperative to understand and brush up on car sales psychology to stay a step ahead. In this article, we will talk about how to boost vehicle sales in your dealership. 

The car selling process has swiftly evolved!

The future of auto sales is rapidly shifting gears. Why? Vehicle buyers want to spend less time at dealerships. Instead they wish to start the car buying process online itself. But how can dealerships adapt in this digital age?

The process of selling cars used to be a well-oiled machine; complete with print ads and billboards, but that is simply not enough anymore. If you think about offering lucrative discounts, even that won’t be sufficient! It is because the price point (and every other detail) of every comparable car within 1,500 miles is at the customer’s fingertips, so even a low price can’t guarantee a sale.

Charisma and a friendly demeanor do help to sell vehicles, but what do you do if customers don’t come to your dealership in the first place? You can’t just wait for customers to stroll in. You need to actively achieve face-to-face time with them before they even step foot in your lot. It is imperative to step up your marketing efforts and advertising – potential customers have to know about the dealership and what it offers.

Here are the 11 tips to improve car sales:

1. It is important to learn your customers’ names and remember them

You are in the business of selling cars, so a name carries a lot of meaning. If you want to boost sales in your dealership, it is imperative that car salespeople are trained to learn and remember names. It includes those of current and potential customers.

In this day and age, communication with a personal touch has dwindled. Emails, text messages and other types of marketing have lost their authenticity. According to a survey by Segment, 60% of customers are likely to bring in repeat business, when their shopping experience is personalized. When you use a customer’s name in communications and tailor content that pertains to their interests, it helps to create a great first impression. Not only that, but you can build rapport and establish trust by making customers feel like they are not just another email address or phone number.

A good car salesperson will learn a customer’s name as soon as they get an online lead, send them an introductory video email and use the customer’s name in the message. It should be exactly like they are talking casually to a friend. The mission here is to make the customer feel like they matter, establish trust, get them to come into the showroom and, ultimately, buy a car.

2. Tap into your customer’s needs

One of the best ways to sell cars successfully is to figure out what customers want and deliver on expectations. It means you have to ask the right questions and listen twice as much as you talk.  Identify pain points such as:

• Specific features needed.
• Financing and credit limitations.
• Main uses for the vehicle (labor intensive, weekly mileage, etc.).
• A previous issue with a vehicle that caused stress and grief.

Thanks to the pandemic, customers have moved a major part of their car buying process online. They spend an average of 13-15 hours conducting research. It is safe to assume that most of them have a specific make and model in mind by the time they step into the dealership.  Ask them questions like:

• What brings you in today?
• What sort of features are you looking for?
• Will you be the primary driver of this car?

Thus, you can pitch them similar options and open up a wider selection of cars to choose from that they probably haven’t even considered.  These questions provide context about what your buyer is looking for, their budget, and who you are selling to. Their answers also allow you to cross-sell or upsell. If the customer lists safety as a must-have, consider upselling them on a four-wheel drive package or pedestrian alert add-on.

Remember, you have to show the customer their dream car, and other similar options, before they even come into the dealership. How? Simple – send them walk-around videos. The idea of this video is to get them into the dealership with an open mind and driving off the lot with a car. Combine this knowledge with their name, so even if they don’t buy from you the first time, you can start the conversation off where you left it when they drop in again.

3. Show that you have adequate knowledge about the buying process

Once you are introduced to potential customers, they are bound to ask questions. Now if they can look up everything from Google, they won’t bother getting in touch with you. Customers are more informed than ever before because:

• They get access to the vehicle inventories across the whole country.
• They have detailed reports regarding any makes and models.
• They probably have also already initiated at least one or a few conversations with other dealerships and sales professionals through email or some other digital communication medium before talking to you.

But only you can give them the full picture along the car buying process – not Google. To stand out in the new level playing field, give prospective clients direct answers to questions, on a more personal level via automotive video email. It allows you to give them a great car buying experience. Don’t contradict your customers as it could be misinterpreted as condescending.

4. Never mislead buyers

While you are advised to answer questions, please do so honestly. If you don’t know the answer, tell them you will get back, find the answer, and then provide it. For instance, say that a customer notices that a door on a car is a little off-center and has some chipped paint. They ask you about is it and you say it isn’t a big deal, and a fresh coat of paint would cover it up. In actuality, the car was in an accident but you didn’t look into it nor did you apologize for not mentioning it in the first place. This type of situation should always be avoided. Even if the customer never finds out about it, you shouldn’t give a misleading answer.

Another area you need to be upfront about is the costs associated with purchasing the vehicle. There is the processing fee, the tax and registration fee, the licensing fee, and so on. You have to step in and let the customer know about fees before they sit down and get ready to pay for the car. The fees aren’t the problem, as every service has a price. The problem is keeping it under wraps until the very end and blindsiding the customer.

5. Build rapport and make eye contact

If you notice the customer has become quiet, or is shifting uncomfortably, stop selling and focus on rapport. Continue to push an overwhelmed prospect or selling points, and you risk alienating them and losing the sale.

Instead, ask them what they like to do on the weekends, what they do for work, or where they are from. These questions are non-threatening and easy to answer. Once their body language relaxes, you can ease back into the sales process, by talking about their preferred makes and models. This steers the conversation back to the sale and averts a crisis of cold feet.

When the prospect speaks, make sure to hold their gaze. Look directly into their eyes and give a warm, comforting smile. It is important to make them feel at ease. If they are put off by your demeanor, they will think you are uninterested in selling the vehicle to them. It won’t take five seconds for them to walk out after that.  Remember, it could be difficult for some people to make or hold eye contact. If someone is avoiding your gaze, be sensitive to their needs and hold a soft gaze that doesn’t put them on the edge.

6. Make sure to treat customers equally

When potential clients arrive at the dealership, never assume anything about them. For instance, don’t think one makes more money, so they will be investing more. When talking to them, it is important to make them feel included in the decision-making process. Show that they are a valued part of the purchasing process by asking questions, and paying attention to what they say.  In addition, don’t judge customers by their appearance. Don’t assume that someone who comes into the dealership wearing a suit will invest more than someone who comes in wearing a pair of cut-off jeans. You may discover, the customer with the cut-offs is willing to invest more in their ride than their wardrobe. It is necessary not to make snap judgments.

You need to be patient with all your customers, especially those who don’t like making financial decisions. But you have to keep an eye out for those who potentially take you away from deals that are more likely to close. They are known as tire kickers. They don’t fit the ideal customer profile, don’t research the sales solutions they require, and most importantly, can’t afford what you sell. If someone is coming into the dealership every day for a week, and going for test drives on multiple cars without making a decision, it is a red flag to watch out for.

7. Don’t talk trash about competitors

When potential customers come into your dealership, and say they received a better deal at your competitor, resist the urge to trash-talk. Instead, focus on what makes your dealership different. So ifsomeone comes into the dealership and tells you how the competitor is offering more discounts on the selling price, take a moment. Then convince them how your dealership offers the best after-sales service, how you are available to address their concerns, etc. You can even throw in an extended warranty too!

8. Be firm with your price, but don’t push it

You should know when to make the sales pitch and start talking about price. When you know the buyer is in love with a car and ready to buy, that is a good time to ask, “Are you ready to buy this car today?” and if the reply is “Yes” then you can start discussing cash down, monthly payments, trade-in values, and more. Tell the car salesperson to involve the sales manager in the conversation to help negotiate price, maximize the dollars for the dealership, and offer a fair deal to the buyer.

It is imperative that you avoid the hard sell. If you are too insistent, the customer is likely to back off, and not come back. Remember, the customer is probably interested in buying, but they don’t want the salesperson to know it yet, for fear of dealing with the hard sell.  One way to avoid this tension and eventual haggling is to be upfront with the price. This way, the potential buyer knows the price of the car right off the bat and they can simply choose to buy the car for that price or walk away. Be more honest about how low you are willing to go instead of posting a price that is the highest possible.

Selling cars require a lot of patience. It is not just about selling a toy, books, clothes or makeup. This is one investment that will last for years, so customers are wary before purchasing any vehicle – be it used or new. As ironic as that sounds, people want to buy, but they don’t want to be sold to, so it is important that you don’t come off as desperate or pushy. If they aren’t ready to make a decision immediately, it is fine. Tell them to take time, think it over, and then decide. Send a video thanking them for touring your dealership and how much you look forward to their next visit. Keep cultivating relationships, be patient, and your efforts will surely pay off.

9. Don’t discuss payment until the price is finalized

It is advisable to discuss the price in the last part of the journey. When you ask a customer if they are ready to buy, and they answer in the affirmative, only then should you discuss price. Payment, cash down, and trade-in value are all part of this process. Wait until the buyer is in love with the car and ready to buy. Then, leverage your sales manager to negotiate a price that will give your buyer a fair deal and maximize the dollars in your dealership’s pocket.

The biggest mistake you can make is to ask what kind of payment a customer is looking for before even discussing price. Car salespeople should be trained that they never begin talking about payment first. They should, however, be considerate in addressing the customer’s budget and financing concerns.

10. Don’t forget to follow-up after a sale

Once the customer drives off the lot with their car, it doesn’t mean your work is done. Remember, the idea is to build a long-term relationship with the customer. It not only results in repeat business, but they spread positive word-of-mouth regarding the dealership.

One of the strategies to being successful is keeping that customer for a lifetime either by getting them to come back or garnering referrals. After the sale, you should follow up and check how they like the car. Call them after a week and ask if they are facing problems with the vehicle. If they are, try to prescribe suitable solutions. Encourage them to leave a review or testimonial on your webpage or social media. Request them to send referrals if possible, and thank them for their business as well. This is best done through personalized communication, like a video, where you can show sincerity. Small gestures like these leave a lasting impression.

11. Stay on top of marketing online initiatives

Since buying behavior has changed drastically in the last two years (a major part is done online), it is time for all dealerships to adapt. Online marketing is essential nowadays, if you want your business to thrive. It requires clear and consistent messaging to get people through the door. You can do it with compelling video content on social media and other online marketing platforms. Make interesting videos about your team and culture, walkarounds, giveaways and service center specials, vehicle maintenance tips, etc. Be an automotive expert that existing and future customers can trust, so they will be convinced to purchase from your dealership.

The economy is slowly rebounding, so it is time to ramp up on strategies to drive more customers into the dealership, increase vehicle sales, and boost revenue. Follow these pointers, tweak them a bit if necessary, and you shall soon clock more sales!

The post Car Sales Psychology – 11 Tips and Tricks to Sell Better appeared first on Modera.

It’s probably safe to say the hottest topic around all automotive circles has undoubtedly been how the Green Initiative has and will continue to affect the industry. With a clear focus on reducing the carbon footprint of vehicles and finding more environmentally-friendly alternatives, producing electric vehicles and hybrids is not actually the only approach that could help us achieve our goal of a greener future. This tie, let’s look into how both car makers, dealerships and showrooms could do their part in giving our planet a bit of a break. 

No Cars Is a No-go

As much as the initial goal of the Green Initiative was to try and reduce the amount of cars and other vehicles roaming the streets, it is pretty clear that people are not exactly rushing to hop on that bandwagon. Most people prefer the flexibility, comfort and privacy that private cars offer when compared to public transportation. 

As different countries implemented various incentives to get people on board with opting for public transportation, the pandemic presented an unexpected roadblock that put those efforts to a halt. People became even more dependent on the safety and privacy of private vehicles and public transportation was once again pushed to the backseat as people were not looking to spend time in the close proximity of one another. 

By now, the trend of preferring to have one’s own set of wheels doesn’t seem to be showing any signs of stopping, so in order to keep up with the requirements and clear goals set by the governments, the automotive industry has no choice but to find alternative ways to do their part for a more sustainable and green future. 

Over Two Thirds of a Journey Is Spent in a Car

According to research, people use their cars to cover 70% of their journeys. This does not necessarily mean just private cars, but also taxis and ride shares. The call to get people to opt for public transportation instead, seems to have done little to nothing to change that approach. 

Although alternative, more environmentally-friendly means of transportation have been welcomed to the streets in the form of electric bikes etc. in recent years, there is a level of comfort that can only be provided by cars. People in colder, rainier climates will most likely always prefer the comfort, privacy and safety that comes with driving one’s own car. Ironically, most people seem to be on board with trying to lead a more sustainable lifestyle, but making sacrifices when it comes to their mobility, is not the approach they’re willing to take. 

There’s no arguing that no other means of transportation can offer the same amount of flexibility and freedom that a private car does. What also needs to be taken into consideration, is the fact that many elderly people and people with special needs depend on having a car to be able to lead a normal life. 

It’s worth mentioning, that it’s not just average people running errands and getting to work that are not ready to give up on their four-wheeled friends. Many important everyday services are still carried out by using traditionally-fuelled vehicles. The ambulance, post services and garbage collection are all great examples of everyday services that depend on having special vehicles to get the work done.

Inspiring Innovation in the Car Industry

Taking the above-mentioned into account, the most obvious and popular approach for directing the automotive industry on a greener path has been the introduction and production of electric vehicles and hybrid cars, to help reduce the immense amount of CO2 emissions the automotive industry is responsible for. There are however other approaches that can lead the industry towards a more sustainable future.

Traditionally the car purchasing process has been one involving a lot of paperwork and many visits to the dealerships and showrooms. There is no arguing this in itself puts a great toll on our Mother Earth. With the world turning more and more towards digitizing and automating processes, this is something the car industry could greatly benefit from.

By implementing more digitalization to the car sales process, the amount of C02 emissions derived from such processes can be reduced significantly. Imagine doing all the necessary paperwork online without having to print out a single sheet. Now, imagine being able to choose and configure the exact car you’re after fully online. You’ll be able to choose the model, colour, interior, all of the accessories and even negotiate the price without having to leave the comfort of your home. This means all the unnecessary drives to the showroom have been made redundant, making the entire car purchase process much more sustainable, not to mention comfortable and less time-consuming. 

There’s a Way to Make It Happen

In order to make this approach a reality and digitize their processes, dealerships and showrooms can implement an innovative digital platform created specifically with the needs of the automotive industry in mind. An all-inclusive automotive software solution can help with anything starting from capturing leads and managing them via a high-quality CRM-system, down to sending out offers, signing sales agreements and scheduling car deliveries. Best part of it all – this fully digitized approach will help reduce the carbon footprint of dealerships and showrooms and help customers make greener choices while obtaining their new set of wheels.

If there’s ever been a time to invest in innovation to stay ahead of the game, that time is now.

Check out the automotive software solutions offered by Modera to increase the efficiency of your dealership and reduce the size of your carbon footprint.

Reach out to us for a free demo or if you have any questions. 

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Cover image Pexels

The post Will the Green Light Be Given to Green Cars Only? appeared first on Modera.

Looking to buy a new car and trade an old one?

Trading in your current vehicle at a dealership can be an excellent way to get the old vehicle off of your hands, while paying a nominal sum for the new one. However, the old car needs to be in reasonably good condition and meet certain requirements, for you to get a lump sum.

On the other hand, dealers too need to contribute in a certain way to guarantee a quick trade-in process.

What You as the customer should do?

Prep the car for a trade-in

This process doesn’t mean you are simply selling it to the dealership and hoping to get the best possible sales price. However, one of the upsides is you typically don’t need to get the vehicle repaired first. It is the dealer who takes care of the refurbishing.

Here’s what you should do:

• Gather all documents related to the vehicle. You need to show that you have kept up with preventative maintenance, provide receipts on tires, brakes, etc., offer proof that necessary repairs were performed in case the vehicle was in an accident, and show that you have paid off existing loans.
• Spruce up the car. Give it a nice look inside and outside. Un-pair smart devices from the vehicle’s Bluetooth connection, and wipe off calling history. Don’t forget to clear out your home address and any destinations from the navigation system.
• Know your car’s value – Before heading in to the dealership, make sure you know the approximate trade-in value of your vehicle. Otherwise you have no way of knowing if you have got a good deal or lowball estimate.
• Don’t skimp on parking tickets – While dealers might take care of certain fixes, it doesn’t mean they will do so for unpaid parking tickets. It could prevent the title from being transferred. In some areas, unpaid parking tickets are turned over to collection agencies, who send people to collect payment from whomever owned the vehicle at the time of the infraction.

What do appraisers look at?

These are the following aspects that appraisers consider during trade in processes – here goes:

• Vehicle age – The value of a car gradually declines with age as newer models come out.
• Mileage – Estimates are generally based on 10 to 12 thousand miles every year. The value takes a hit if it is more than that.
• Ownership – Models with only one owner have more value. The vehicle history report is checked to verify number of owners.
• Condition of vehicle – If your vehicle is in decent condition, it will be worth more as a resale. But if serious repairs have to be done, it impacts the offer, as the dealer will have to pay for it.
• Matching tires – If all tires match and have good tread life left on them, it can positively affect the total value.
• Mechanical issues – The vehicle needs to run smoothly. If the appraiser suspects a problem, then a chunk of value will be knocked off.
• Options and add-ons – If the vehicle has several factory options, it is much more valuable than a base model of the same car. Appraisers look at equipment that you have added, and increase or decrease according to what they find.

What You as the dealer can do:

When it comes to trading in a vehicle, the biggest issue is car owners wondering if they have got a fair price. This is where evaluation plays an integral role.

Modera’s trade-in tool is one of the best in the market, as it lets salespeople capture each and every detail of the vehicle. To put it in a nutshell, helps to guarantee a quick and transparent trade in process. Thus, you can get a quick market-based value estimate, after all the factors have been taken into consideration. Integration is seamless, as vehicle details can be captured by simply inputting the vehicle registration number.

Here is what you can expect:

1. Don’t worry about repairs

Capture the wear and tear of the vehicle, and select installed equipment from a pre-defined list, which helps to hasten the process. Click clear images of damages that could affect the trade-in value. It helps to keep the car appraisal process more accurate.

2. Taking photos

Photos should be taken of the entire car, which includes both interior and exterior. Take pictures, so you can come up with an offer. Use desktop backend for a full trade in car appraisal.

3. Price calculation

As mentioned, evaluating the vehicle properly is of the utmost importance. This feature helps to compute purchase price after factoring in market value, sales days, depreciation, and so on.

4. Process paperwork

No more waiting for days, in order to get the paperwork processed. There are predefined templates that can be sent via email, which includes purchase proposal, evaluation act, and purchase agreement. It helps to reduce the time wasted in processing paperwork.

5. Notifications and chatting

Want to confer with your team? Use the internal built-in chat feature to talk and collaborate anytime you want. You can customize automatic notifications that keep the team appraised about every stage of each trade in process. You can also get a complete overview of the team’s trade in process, measure your trade in volumes, and identify areas of improvement.

As a dealer, you have to guarantee a convenient trade in process, and Modera is one of the best ways to accomplish this purpose. This is a multi-platform trade in solution that can help salespeople sell cars fast and close each deal successfully.

As you have already taken enough time to read this article, why don’t you request a “Trade In” demo or start a free trial here.

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Cover image Pexels

The post How to Guarantee a Quick and Transparent Trade in Process? appeared first on Modera.

The automotive industry is slowing bouncing back after the pandemic had brought operations to a grinding halt. However, a new problem has arisen – there is a dire shortage of semiconductor chips that have affected production of vehicles globally. Vacant parking lots and limited purchasing options are just some of the issues cropping up due to this shortage.

What is the chip shortage?

As per a report by the BBC, silicon is the backbone of $500 billion chip industry. In fact, the chips underpin a global economy, estimated at a whopping $3 trillion. Raw materials of the semiconductor business are often shipped from Japan and Mexico, with the chips made in Taiwan, China and some in the U.S.

Chips are not only used in vehicles but a number of other devices and gadgets too. Due to the Covid-19 pandemic and subsequent transition to becoming digital, there was an increased demand for electronics like smartphones, laptops, etc. Since chips are used in manufacturing these, the demand shot up to a point where production couldn’t keep pace with it.

Why did this happen?

As we all know, the pandemic forced automakers, suppliers, and car dealerships to shut shop in March 2020. As a result of which, the economy went into recession. Automakers who had survived past recessions immediately cancelled orders for parts with computer chips. This is because they had an inkling that sales might nosedive.

Sales of new vehicles did fall initially, but rebounded fast too, thanks to pent-up demand and 0% financing offers. Some dealers smoothly transitioned to selling vehicles online. They offered home pickup and delivery services. Now that factories have restarted production, the demand for new vehicles is stronger than ever. Unfortunately production remains outpaced and is yet to catch up.

Automakers and suppliers, who had previously cancelled their orders for parts with computer chips, reordered them. However, the chip capacity was consumed by other devices like phones, computers, video games, etc. According to Joe McCabe, CEO of AutoForecast Solutions, monopoly of global chip production lies with few global, Asia-Pacific suppliers. He states that since everyone closed operations at the same time, there was no way to build inventory products and solutions when businesses reopened. This issue led to a considerable bottleneck in all manufacturing processes.

What does the situation look like?

Back in May, the global consulting firm AlixPartners reported that chip shortages could end up costing the automotive industry $110 billion for the year 2021. The Alliance for Auto Innovation, the trade group representing automakers has predicted the shortage can affect production for another six months. Needless to say, it means fewer vehicles will be manufactured this year.

To keep assembly lines moving and mitigate losses, automakers need to get as many chips as possible. However, it is not clear whether they can make up the production and any revenue losses over time. At present, losses are being offset by higher prices of cars and reduced expenses. Almost every major automaker has been forced to make production cuts. Inventories are extremely low and consumer demand is at a high, so vehicles cost more.

In the first week of June, the average listing price of a new vehicle was $40,566. That is up nearly $200 from the prior week. The average listing price was 5.5% above last year, and 10.3% above the same week in 2019. Even used car prices have shot up – new cars aren’t moving, so trade-ins aren’t happening, causing a shortage of used vehicles.

How long will the chip shortage last?

It is tough to assign a time frame to the chip shortage, but Cisco CEO Chuck Robbins said in late April that it will last for six more months. After that production is bound to be ramped up, so the scenario should improve in the next 12 to 18 months.

What are automakers doing?

In the short term, they are cutting down on production of vehicles that aren’t much in demand. Or those that are not as profitable as pickups and SUVs. This is a temporary solution to redirect chips from cars into the money-making vehicles. They are even manufacturing vehicles and parking them till chips become available. Yet another way they are coping is by building vehicles minus some features. For instance, Tesla has left out the passenger side lumbar support. And GM has omitted automatic start-stop and fuel management module.

However, these solutions won’t work in the long term, so automakers are examining their supply chains. The just-in-time-inventory system that they took from Toyota could be revamped, some with important parts like chips. On the other hand, chipmakers are trying their best to ramp up production and build more capacity, including in the US.

Meanwhile, the Biden administration has formed a task force to evaluate the supply chain of chips. As of now, a majority of the US Senate has voted in favor of legislation that is looking to battle back against overseas competition. It involves a growing threat from China, including investing more than $50 billion into the manufacturing of semiconductors.

The chip shortage has exposed how a limited production capacity of a vital component can turn into an issue of national security. That is why every major global market now has backing from their governments for a combination of domestic and redundant supply streams. Many new, smaller chip producers are likely to scale up to combat the issue of shortage in future, with government money supporting their ventures.

Learn how Modera can help automotive industry here.

The post How is the Global Chip Shortage Affecting the Automotive Industry? appeared first on Modera.

Charging times

There are three levels of chargers available for EVs at the moment:

• The 120-V plug, used for home appliances, is slow to charge. But it can fill a battery to near full capacity with a couple of nights’ charge. Or around 20 to 40 hours.
• The 240-V chargers provide 20 to 25 miles of charge in an hour. This means that charging time decreases down to 8 hours or less. 
• DC fast chargers can power up batteries to about 80% in just 30 minutes.

As of now, the level two chargers are available widely. The cost differences between the charger types have to be factored in. As per a study by the Rocky Mountain Institute, costs for a level two charger’s components range from $2,500 to $7,210 and from $20,000 to $35,800 for a DC fast charger. Stations have to balance the cost of installation with needs and convenience of drivers.

Charging infrastructure

Several electric vehicle owners charge their cars at home in their garage via a special wall-mounted charger. But for drivers who live in apartments, parking garages are rarely equipped with charging infrastructure.
Installing these chargers can be cost prohibitive for building managers. 

There is the issue of electric costs incurred at common outlets as well. Since regular EV charging uses up more energy than most residential uses, building managers require a system. System to keep tabs on EV charging to ensure the driver of each vehicle pays for their own electricity usage. Expanded charging infrastructure is a must for EVs to make long-distance trips that require several stops for charging. A study* stated that an excess of 10,000 more charging stations should be installed. This is all to support EV charging requirements on inter-city corridors by 2025. For longer trips, EV owners often experience “range anxiety”. “Range anxiety” is the fear the car will run out of power before reaching a charging station. Surveys show that concerns about range and charging availability are an important limit on consumer uptake of EVs.

*by International Council on Clean Transportation

Compatibility of electric vehicles chargers

Development of level two chargers has been great, with all automakers besides Tesla using the same charge port model. However, there are three different varieties of DC fast chargers being used by auto manufacturers:

• SAE Combined Charging System – used by most.
• CHAdeMO, used by Nissan and Mitsubishi.
• Tesla Supercharger, which is only for Tesla drivers.

Lack of vehicle compatibility differs from universal vehicle access to gas stations, which can be a huge hurdle.

Capacity of grids

Eventually, swapping a national fleet of vehicles powered by gasoline, for EVs can be good. This means stretching the electric grid to capacity with millions depending on it. Power generation capacity has to be sufficiently stepped up to accommodate these vehicles, while ensuring there is no additional strain. 

According to the Department of Energy, electricity consumption is likely to increase by 38% by 2050. This is mostly due to many car owners switching to EVs. The main challenge is that some grids have the available excess capacity to generate increased amounts of power. And this with existing infrastructure under favorable assumptions for charging times, but others don’t. The ability of grids to be able to handle EV charging also depends on the time of day the vehicles are plugged into it. Chances of overloading grids are much lower, if EVs are charged at off-peak hours.

Financing of electric vehicles charging stations

Needless to say, EV charging stations are extremely expensive to install. Public station component costs can range enourmously. Prices are between $2,500 for a level two charger up to $35,800 for a DC fast charger, as mentioned above. However, this price range excludes the installation costs and other expenses. Expenses uch as navigating the permitting process, regulations, and interconnection with utilities.

Car and energy companies are the main financers for charging station constructions. But there are also business owners, which include managers of parking lots and garages, shopping centers, and retailers. So everyone who wish to attract more EV users. 

There are some big charging station projects underway. But these have tended to be unprofitable in the past due to high upfront costs. Use of electric cars has to be more widespread, in order to make significant gains. Some states like California and Texas have allowed utilities to invest in EV charging stations. 

Climate changes and renewable energy

The electrical grid is reliant on fossil fuels, which reduces cost-effectiveness of EV adoption as a strategy for reducing emissions. The degree of emissions is much lower for EVs when renewable energy sources make up a greater proportion of the energy mix. Maximizing the use of renewable energy to power electric vehicles is therefore crucial.

Carbon emissions can go down drastically, if electric vehicles are widely adopted. Vehicle costs have gone down as battery prices have reduced, and EV sales are growing. However, more needs to be accomplished. There are several infrastructural obstacles to be handled. Along with technological, economic, and behavioral problems and trade-offs. All which are standing in the way of EVs being adopted by all.

Find out more about the solutions that Modera offers for automotive businesses HERE. 

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Customer loyalty and customer retention is the foundation for all dealership operations. Why sell five vehicles to five different people when you can sell five vehicles to one customer? Here, we will take a look at some of the proven dealership customer retention strategies being implemented by the most successful dealerships.

Interesting facts about auto dealership customers

Before we get started on customer retention strategies, here are some eye-opening facts that will help give you insight into how to identify and manage customers.

1. Consumers are more loyal to their vehicle brand as they age

As customers get older, they get “set in their ways” on what brands they trust. Therefore, if you have an older customer on your roster, then they are more likely to buy their next vehicle from you. Treat that customer like gold.

Here is a look at the customer retention rate by age range:

2. 62% of customers stop doing business with a company because of poor customer service

You probably remember the times that you have had a bad customer experience. Well, according to the data, 62% of customers who have had a bad experience, will stop doing business with a company. That is why damage control is so important.

3. It cost 7 times more to sell to a new customer versus a returning customer

You probably already know that it costs much more to get a new customer than sell to a current customer. You may be surprised that the cost difference is about 700%. That’s why it is so important to focus on existing customers and improve your dealership customer retention strategies.

4. A 5% increase in customer retention can result in 25% increased profits

Just to show how important it is to look at customer retention, a simple 5% increase in your customer retention can increase your profits by 25%. Therefore, it is worth the time investment to focus on the customer satisfaction of your current customer base.

5. Customers who service their vehicle regularly – at your dealership – are 86 times more likely to purchase their next vehicle from you

The service department is an excellent source of revenue for your dealership. However, your service center is also a great way to keep your customers coming back for more vehicle purchases and leases.

In fact, customers who have their vehicle serviced regularly at a dealership are 86 times more likely to buy from that same dealership. That’s something to keep in mind when creating incentives to get customers coming in for regular service.

Dealership customer retention strategies

Now that we have established how important it is to keep existing customers coming back, let’s take a look at the top 10 proven strategies that can increase customer retention, expand profits and lead to a more lucrative dealership business.

1. Encourage regular maintenance appointments

As we discussed before, having your customers visit the service center – on a regular basis – greatly increases their chance of making a purchase or lease in the future. Therefore, you will want to make every effort to convince customers to get regular service at your dealership. Here are some ways you can make that happen:

Make use of automated service reminders – You can utilize text messaging and e-mail campaigns to remind customers to have regular service performed on their vehicles. By automating the process, you can ensure that every one of your customers is notified. This will help boost the number of regular visits to your service center.

Allow for after-hours appointment scheduling – Data shows that 22% of people will schedule service center appointments after-hours. Within that data, there is a bias towards younger drivers who will schedule their service center appointments when your dealership is closed. Make sure your website and phone system allows for after-hours appointment scheduling.

Offer service specials – As stated before, regular service center visits leads to an 86 times more likely hood of a repeat purchase. Therefore, it may be smart to offer discounts on service center visits.

Educate your customers on the importance of regular scheduling – Many vehicle owners tend to put off regular maintenance thinking that it is not important. Be sure to create social media posts, blog articles, and direct mail campaigns that stress the importance of regular maintenance and the costs of not properly maintaining a vehicle.

2. Send non-business messages to your client list

Business is all about relationships. You have to mix up your dealership customer retention strategies. Therefore, you want to do more than simply communicate with your customers through marketing messages. In fact, you’ll want to stay in touch with your customers in the same way that you do with friends and family. The great news is that offering these regular communications can be automated and done at very little cost. Here are some great non-business communications that you can text, e-mail, or physically mail to your clients:

Birthdays – Who doesn’t like to get well wishes on their birthday? Chances are that you have your customers’ birthday on file. You can send your customers an email and text wishing them a happy birthday. For your high-value clients, it would be worth the investment to mail them a birthday card.

Anniversaries – Do you have a client that is celebrating an anniversary? This is another great way to reach out to them.

Holidays – During the holiday season, you can also send out cards and well wishes.

Community events – Does your city have a specific festival or event? Perhaps the local college or professional team is competing for a championship. Communicating about any local event can help endear you to your customers.

3. Over-respond to poor customer service experiences

As stated before, 62% of customers will break off a relationship with a business after poor customer service. Therefore, when you get a complaint from a customer, then this should be an “all hands on deck situation.” You will want to go out of your way to make sure that the customer feels that the matter has been resolved. Here are some steps that you can take to deal with a poor customer service situation:

Have someone senior at the dealership directly correspond with the customer – Customers want to know that their complaint or issue is being dealt with by someone who can take decisive action.

Make sure that the complaint is solved as soon as possible – People tend to be emotional when they are upset. You can quickly get that person’s emotions in check with a quick response.

After the complaint has been resolved, follow-up – After the complaint has been resolved, the customer may still have some negative perceptions about your dealership. Be sure to follow up to see if there is anything that you can do to make them happy.

4. Curate your dealership’s reputation

With online reviews and social media, it is very easy for a potential customer to gauge the reputation of your company. Therefore, it is important that these online reviews and social media messages are constantly curated to ensure that the dealership’s reputation is seen in the best possible light.

Here are some steps that can help curate the dealership’s reputation:

Respond to every negative social media posting – Make sure your dealership’s social media manager monitors every mention of your dealership and responds to every negative comment in a professional manner.

Challenge hostile reviews or “review bombing” – There are cases where certain individuals may try to inundated review sites with multiple negative reviews of your dealership. Be sure to contact the review site and have these reviews removed as soon as possible.

Hire an online reputation manager – There are companies that offer online reputation management. This service may be valuable to your dealership if you have a large social media presence.

5. Sell a car with a service package

The key to expanding dealership profits is getting the most revenue from a customer. Therefore, it’s a good idea to sell a service package to existing customers. Data show that service packages can lead to a 50% higher retained margin over a customer lifetime. Cross-selling improves margins and profitability.

Now customers are usually resistant to upsells, therefore you have to sell the value of a service package. Here are some ways that you can get customers to pull the trigger on a service package:

Discuss how regular service can maintain the value of the vehicle – You can imply that regular service will allow the vehicle to be more desirable when it comes to selling or trade-in the vehicle.

Stress the importance of regular maintenance – Remind the customer that regular service can maintain the performance of their vehicle.

Show that buying a service package is an affordable choice – Your service package can offer an overall discount versus booking a number of separate service visits.

6. Reward your most profitable customers by creating a VIP program

Your most profitable customers should be treated like gold. The good news is that these customers already like your dealership. Therefore, you will want to protect that relationship. You can do this by creating a VIP Program. Here are some features that you can include in a VIP program.

Ability to reserve in-demand vehicles – If your dealership is getting a hot vehicle with lots of demand, then you should offer that vehicle first to your VIP members.

VIP services – Chances are your VIP customers may be busy people. Therefore, you can offer bespoke services such as complimentary pick-up and delivery of vehicles for service visits, test drives at their residence or office, and a dedicated VIP customer service line.

VIP parties – Have a new vehicle coming to your dealership? Turn that event into a release party and invite your VIP guests to get an up-close look at the vehicle.

7. Create a customer referral program

Turn your customers into your sales team. Chances are that your customers like your vehicles and trust your dealership. Also, your customers may know people who are in the market for a vehicle. By offering incentives, you can add extra sales with less spending on marketing.

So what should you offer in your customer loyalty program There are a number of approaches that you can take. Here are a few.

Service center coupons – As stated before, you will want to get your customers into the service center a much as possible. You can offer 50% coupons on major maintenance work for every referral that leads to a lease or a sale.

Gift cards – You can also offer gift cards to your aftermarket accessory store or partner with another local business such as a restaurant. You can also simply offer a Visa or Mastercard Gift Card.

Cash Rewards – Who doesn’t like cash? You can simply offer a cash reward for every referral that leads to a lease or a sale.

8. Utilize customer relationship management

Managing your customer relationships can be overwhelming. However, there are a number of CRM solutions that will allow you to better handle the flow of leads and stay on top of potential sales. Here are some of the top features that you will find in a top tier CRM system:

Customizable dashboard – This allows you to better manage the flow of leads and potential sales.

Internet lead management – You can organize leads and assign them to members of your sales team.

Marketing tools – You will have lots of marketing tools in your overall strategy. That includes everything from email to direct marketing, text messages, internet advertising, and more. A CRM tool will allow you to better handle your dealership marketing.

Customer data management – Be able to access anything that you need to know about your existing customers including their sales and service history, credit information, and more. This data can help you generate reports on sales trends, demographics, and more.

Training and support – CRM systems are robust. Therefore, you want to make sure that your CRM provider is able to provide complete training as well as ongoing support to make the most of the system.

9. Send your existing customers updates on new vehicle releases

Statistically, your existing customers are going to be the most receptive to your brand’s newest vehicles. Therefore, you will want to keep your existing customers updated on new vehicles that will be coming out in the next 12 months.

Here is some information that you can include in these messages:

What is unique about this vehicle – Does the new vehicle have high horsepower, innovative tech, or breakthrough style?

When is the test drive available? – Encourage your existing customers to be the first, in the area, to test drive the vehicle.

How does the new vehicle compare favorably against the competition? – Show how this new vehicle will have an edge on any competitor.

Selling a new or better model of the same car is the key driver in dealership customer retention strategies.

10. Make use of personalization to make customers feel special

Customers will want to know that they are valued. This will make the customer more likely to visit your service center and purchase more vehicles in the future. One way to accomplish this is through personalization of communications.

Here are some ways you can make use of personalization:

Personalized direct mail – Sending direct mail with the person’s first name can go a long way to making sure that the mail is read.

Personalized email – Most email software allows you to place the person’s first name in the salutation. This can go a long way in ensuring that the message is read.

Personalized text message – a personalized text message – with an offer – should convert better than a non-personalized message.

Getting more from each customer

Make sure that you don’t miss any opportunity to maximize the value of each customer. Be sure to treat your existing customers as valued assets, market efficiently, and take advantage of any opportunities to get an edge in your dealership business.

It is easier and cheaper to sell 5% more to an existing customer than to get 5% more customers.

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