Profitability hinges on sales strategy. Why??? (Pre registration)

If anyone buy a car it is mandatory that he has to pre-registration his vehicle.this is nothing new to the human being but It’s a contentious topic and one that, for many franchised dealers, paves the way for a variety of business challenges. On the one hand, pre-registration enables dealers to meet the monthly sales targets set by manufacturers and release the bonuses that are important to overall profitability. All too often however, the risks will outweigh the benefits. First, there’s the obligatory time gap between registration and sale. Legally, dealers must retain pre-registered vehicles for 90 days before selling them on meaning significant amounts of revenue are essentially ‘locked up’ for three months.
Then there’s the negative effect that pre-registration can have on the sale of brand new stock. For many customers, being able to buy a showroom-fresh car with minimal miles on the clock at a heavily discounted price is the more appealing option, leaving new car sales facing a challenge. Likewise, the generous offers on pre-registered vehicles can have a knock-on effect on the value of used stock, driving it down even further. As CAP have stated, oversupply among nearly-new cars may ‘ripple down’ through the other age bands as older cars devalue to remain competitive on the forecourt. Ultimately, when supply outstrips demand dealers are the ones who are left to suffer.

Making pre-registration work
If poorly managed the entire pre-registration process can spiral out of control and damage retained margins. In order to minimise risk and turn pre-registration into an opportunity, dealers need to take more of a strategic approach to sales – taking steps to make sure profits are made and they don’t end up with a backlog of stock.
Essentially it all comes down to pre-planning, both in terms of ensuring a good balance of new, nearly-new and used vehicles and making sure potential customers are selected and targeted effectively.
For example, dealers can take into account the 90-day rule and use it to their advantage. In the three-month holding period where pre-registered vehicles cannot be sold, dealers should address their existing stock sales, particularly used cars. It may sound obvious but selling what’s already at the dealership will help to reduce pressure further down the line. dealers can optimise a used-car sales push by ensuring that team members use the correct sales techniques. Enlisting the help pf professional trainers can be beneficial here. Organisations such as ourselves can offer on-site tailored coaching, designed to improve customer handling skills and boost profitability.
Dealers should also make sure they take full advantage of the data stored within dealer management systems, in order to sell the right vehicles to the right customers at the right time. By extracting and analysing the relevant information, dealers can identify which of their existing customers and potential customers will be looking to buy a car in the next three to six months, the prices they are willing to pay and the type of vehicle they would be interested in.
Once the correct customer groups have been identified, dealers can go a step further to arrange dealership events that are tailored towards specific sales. For example this could include a specific used car weekend event designed to drive an effective sales campaign to free up cash held in stock, such as the regular events hosted by the Bristol Street Motors group.