How Connected Vehicle Technology is Recouping COVID-19 Dealership Losses

The global pandemic shifted the way the average American engaged in transportation. Employees were unable to commute to work by public transportation, and the closure of offices reduced commuting. Cars sat in driveways or were sold to pay rent, and incentives to purchase new vehicles disappeared. New car sales plummeted as mass layoffs ensued and disposable income depleted – leaving dealerships in financial distress. As the economy enters post-pandemic recovery, dealerships are searching for strategies to increase profitability without lowering operating standards. The simple solution most are discovering? Connected vehicle technology. 

Facing Financial Struggles

According to an automotive industry report by CNBC, 2020 marked the fourth largest annual decline in automobile sales since 1980. General Motors reported $6.4 billion in profits during 2020, a 4.5 percent decline from the previous year. Dealers were forced to close showrooms, lay off employees, slash prices, and in some cases, move locations. One J.D. Power sales forecast predicted an 80 percent decrease in sales during April of 2021. Thankfully, this prediction did not come to fruition. 

In the fourth quarter of 2020, the automotive industry experienced an unexpected increase in sales. During this quarter, GM reported $2.8 billion in profits, a drastic increase from their profits just three quarters prior. Many franchises are capitalizing on the increase in profit to invest in methods of generating future revenue.

Strategic Profitability Boost

Dealerships are implementing new offerings and features to create a competitive advantage. Ford CEO Jim Farley recently announced his intention to invest $29 billion towards technological advancements, such as electrification and autonomous driving. Adding value to an automobile either through larger investments or minor installations is a strategic way to capitalize on the profit generated by the current sales increase. 

Other profitability strategies focus on more immediate ROI. These repeated return strategies include offering a free first oil change to incentivize the reciprocity of service loyalty or installing a piece of equipment which notifies users or needed maintenance.  

Installing Profitable Connected Vehicle Technology

Some technological investment strategies involve a dual approach to sales. That is, certain technology increases the value of the initial sale as well as increases profit through incentivizing repeat maintenance. 

Elo GPS and CarRx is one of the leading applications in the US helping new car dealerships add profitability to their operations. This connected vehicle technology is installed into a car’s OBD port and has the ability to track a vehicle’s location through GPS, helping to mitigate theft while increasing visibility. Additionally, the CarRx maintenance platform can translate over 10,000 error codes to plain English while notifying drivers of service needs. 

For example, if the check engine light suddenly illuminates, the individual will receive a notification on their mobile device indicating what service needs are required while allowing the driver to schedule the needed maintenance directly in the app. This technology adds value to the immediate sale as it can be included in the vehicle sale price and provides future sale opportunities through additional returns for maintenance. Unlike general vehicle notifications, CarRx only sends the customer directly to your dealership for maintenance. 

Start Adding Profit with Elo GPS and CarRx

According to the National Automobile Dealers Association, automobile repair service sales were down 8.5 percent in February compared to those of last year. Investing in a connected vehicle technology will incentivize automobile owners to receive their service directly from the dealership in a strategic way to retain customers and increase profitability. To learn more about how Elo GPS can add profitability to your dealership, contact our team to schedule a demo.