Driven by the promise of a better tomorrow, car makers are continuing to push forward with powerful incentives that have consumers smiling – new-vehicle sales were up in May! According to Cox Automotive, buyers reaped the rewards of swelling sales incentives, leading to a promising month of purchases.
1. Incentives Climb May – Cox Automotive
Record Growth for Cox Automotive in May
Cox Automotive, a leader in the automotive industry, reported record growth for the month of May. With the Auto Market Index showing gains for the last two consecutive months, it is a positive sign for the automotive market.
The company’s incentives climb in May was a key driver in its record sales performance. Incentives played a role across various product segments, such as Finance & Insurance, Manheim and KAR. New vehicle retail sales were up 13 percent, while used vehicle retail sales rose 7 percent over the same month last year.
The company also saw success in its parts business, achieving a 5 percent increase. Cox reported strong increases in Motor Trend’s Automotive Buyers Audience segment, which dovetail with its efforts in the auto parts market.
Other takeaways from the May report included:
- Overall market registrations rose 7 percent in May.
- There was a 19 percent increase in the sales of certified pre-owned vehicles.
- All types of vehicle inventories, except Fords, showed growth.
Cox’s record numbers in May serve as a welcome sign for the automotive industry, showing strong growth and promise in an area that was hard-hit by the Covid-19 pandemic. The company’s incentives climb and positive market developments create a strong foundation for further growth moving forward.
2. Automakers Turn to Higher Incentives
The automotive industry has begun to lean more towards higher incentives for buyers, such as discounts, bonus add-ons, cashback and more. Many factories have found themselves increasing these incentives to better draw buyers in and give them better value for their money.
From dealerships to wholesalers, higher incentives are a welcomed sight. Buyers can choose between better deals in terms of price, features, addons and more. It’s a dynamic offer structure that needs to be taken advantage of. With a myriad of options to choose from, buyers have become more demanding and have driven incentives to higher levels.
- Exchange bonuses to give buyers credit for trading in their old car.
- Zero percent financing, to give buyers greater purchasing power.
- Special offers with more features than the standard car.
Incentives have become a mainstay in the automotive industry, giving buyers more control and power over the deals they find. It remains to be seen how the sector will adopt and adjust to these changes, but buyers can rest assured that incentives have opened up a plethora of options when they’re on the hunt for their next car.
3. Boosting the Sales of New Cars and Trucks in May
- Studying the Competition
When it comes to boosting sales of new cars and trucks in May, the first step is to gain an in-depth understanding of the local competition. Take a close look at the competition’s prices, promotions, inventory, financing, and customer service offerings. By researching their competitive edge, a dealership can better define what needs to be done to stay ahead of the curve and satisfy customer demands.
- Seemless Online Shopping Experience
Consumers today have become more tech-savvy and want a seamless online and offline customer service experience. Therefore, it is important for dealerships to offer the latest technology and resources to create a streamlined shopping and buying process. This includes implementing an online payment system, interactive mobile apps, customer reviews, and special offers. By creating an engaging and hassle-free shopping experience, dealerships can better increase the sales of new cars and trucks in May.
4. How Offers Help Consumers and Manufacturers
Offers such as discounts, coupons, and flash sales serve to benefit both consumers and product manufacturers. These simple marketing tactics encourage customers to purchase items they may have been undecided about, and help increase the number of new customers manufacturers are able to acquire.
Consumers Benefit
Offers ease consumer’s minds when it comes to investing in a product. They may feel more inclined to buy something without the worry of having to spend too much money.
- Coupons help customers save money on certain items
- Sales offer discounts that lower the cost of the item
- Flash sales create urgency as customers will have to buy quickly otherwise the offer will soon end
Manufacturers Gain
Manufacturers also benefit from offers since they are typically able to acquire new customers and increase sales. Furthermore, these offers also allow manufacturers to become more competitive when compared to other businesses and helps differentiate them in the market, and ultimately be seen as the better choice for customers.
- Sales draw customers to buy the product
- Discounts make the item more attractive
- Coupons create incentive for new and returning customers
As May comes to a close, the primary variables that invigorate the new-vehicle sales market are quickly becoming clear. Incentives have continued to rise as the year progresses, exemplified by Cox Automotive’s latest report regarding new-vehicle sales. Moving forward, manufacturers and dealers should remain mindful of the incentive equation in order to ensure the most efficient return on their investments. With this shift in the climate, new-vehicle sales seem more promising than ever.
