Car sales began to explode this year, partly due to pent-up demand after the COVID-19 pandemic closed many dealers. Another reason may be a wide variety of new autos with advanced features run by software that offer drivers a new level of safety. Finally, more and more Americans want electric cars in a time when large car companies have just started to release them.
Unfortunately for manufacturers, consumers and dealers, cars are in short supply due to an extreme shortage in the chips used in the electronic systems that control many vehicle functions. One measure of car demand is the dealer yardstick of “days on the lot,” which is the period from when a car reaches the dealer until when it is sold. Typically, this is between 50 and 60 days. That has dropped to less than 30 in some places. Some cars are so scarce that the number of days they are on the lot can be measured in single digits.
Dealers have always been critical to car sales. Those with the best sales and service practices tend to get repeat customers. Those that do poorly drive away potential repeat customers. Manufacturers rely on dealers to be their face to the consumers, which in turn affects their reputations.
Widely regarded car research firm J.D. Power has just released its “2021 Sales Satisfaction Index (SSI) Study.” It measures both dealers where people decided to buy cars and customers who rejected dealers. One primary reason people were satisfied was that they got more money for their trade-ins than expected. This comes as no surprise. The lack of supply of new cars has driven the price of used cars higher.
Commenting on the trends, Chris Sutton, vice president of automotive retail at J.D. Power, said:
Right now, it’s hard to see the light at the end of the supply chain tunnel, so dealerships need to continue to sell vehicles through their inbound pipeline and help customers with special orders. However, the silver lining for customers is that trade-in values remain high and this has had a positive effect on customer sales satisfaction.
The study was based on a poll of 35,387 buyers who bought or leased a car between March and May 2021. The study was conducted from July through September.
On a scale of zero to 1,000, the premium vehicle with the best score was Porsche at 833. Among mass-market cars, the brand with the highest score was GMC at 812.
The final scores were based on six weighted factors. The report gives these as delivery process (28%); dealer personnel (21%); working out the deal (19%); paperwork completion (19%); dealership facility (10%); and dealership website (4%). Rejecter satisfaction is based on five factors: salesperson (40%); price (23%); facility (15%); variety of inventory (12%); and negotiation (10%).