The Way We Buy New Cars is Changing

The Way We Buy New Cars is Changing

More automakers are expanding pre-and custom ordering to most, if not all, of their models. How are Chevy dealers adapting to the change?

It’s Not (Entirely) COVID-19’s Fault

There isn’t an industry that wasn’t impacted by the COVID-19 global pandemic, and the automobile sector was hit especially hard. Even though manufacturers are restarting production across their lineups, the semiconductor shortage still looms large. This continues to force automakers to make tough choices about what models to produce and what features to discontinue.

One solution is embracing a pre-ordering model. Of course, going to your Chevy dealer and custom ordering a car is hardly new. In many countries, open commercially-zoned land is scarce, and there aren’t sprawling dealer lots as you find in the United States. But even Stateside, custom ordering has been a popular option for rare special edition models and performance coupes like the Camaro and Corvette.

Automakers realized that inviting customers to pre-order is also an effective way to gauge interest in new models—particularly upcoming electric and hybrid vehicles.

Expanding pre-ordering to the entire lineup allows manufacturers to ration their precious parts—like computer chips—by including them in trucks, SUVs, and cars that have already sold. With upwards of 100 chips powering dozens of systems in nearly every vehicle made, pre-ordering is a far more cost-efficient way to distribute them.

American Buyers are Willing to Wait to Get a Great Deal

Granted, in some cases (new models debuting that aren’t yet in production), the buyer doesn’t have much choice but to wait. But let’s face it: when the world went into lockdown, most of us were stuck at home for weeks at a time. With no place to go, buyers could wait for their new car to get built.

And even in a nation that goes all-in on fast food and fast fashion, getting a truck or SUV with the exact features they want is proving more attractive to auto buyers. Custom ordering delivers the most bang for their buck. And what American doesn’t love getting a great deal?

How Do Dealerships Benefit From Pre-Ordering?

There aren’t many car dealership managers who like the aesthetic of a sparse inventory on a large lot. Though one might expect some resistance to a model that puts individual customer orders ahead of dealership stock, many auto dealers are leaning into pre-ordering.

Instead of taking a gamble on which models and which package options will be popular with buyers in their area, managers can save money by ordering a smaller number of vehicles and negotiating custom orders with buyers. With fewer vehicles to keep track of and insure, dealerships stand to save thousands every year.

But what about the “empty” lots? Dealerships can take advantage of the skyrocketing demand for used and certified pre-owned vehicles and expand their selection.

Time to Embrace a Modern Sales Model

For car shoppers who know what they want, the trend toward custom orders is a wish come true. And the early indications are that it’s a more cost-efficient way for manufacturers and dealerships to sell vehicles. Mass production served the industry well for over a century. Now is a great time to embrace a more modern sales model.

 

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