Brace yourself for 'velocity'
NEW YORK -- There’s a new buzzword trending through the car business right now: velocity.
It has been popping up in conversations and presentations for a while, and is on the lips of visitors here at the New York auto show. And it might be a good thing.
In its new use, velocity simply means the speed with which auto dealers can process a customer from tire-kicker into a satisfied new owner.
And it is not just a rising interest in speed for speed’s sake. Every car dealer probably already gets it: The faster an auto dealer can initiate, transact and consummate a retail delivery, the higher the potential number of deliveries a store can complete in a given business day.
Another example of gratuitous factory pressure on the retailer?
Not this time.
The auto industry now seems to be moving in some unison, like a big single organism.
To operate faster requires a car dealership to have better information from a manufacturer about availability, pricing and finance. Online product information will have to be more reliable and more detailed. Trade-in valuations will have to come in with greater precision, and credit and financing providers will have to respond faster and with more transparency.
BMW, General Motors and other automakers already appear to be putting a shoulder into improving those communication efforts.
But while looking over this week’s New York auto show, Larry Dominique, executive vice president of TrueCar, succinctly laid out the bigger promise of velocity:
Faster, more efficient retailing will lead to higher new-vehicle sales, Dominique reasons -- not just for the retailer who masters it, but “for the entire auto industry,” he says.
“The average consumer comes back to a dealership once every 5.9 years,” Dominique said. “What stops that customer from coming back more often? We know from our surveys that a lot of them don’t want to come back just because they don’t want to go through the sales process again. We believe that if it’s a more efficient and more transparent process, people will actually come back and buy cars more frequently.
“That will increase throughput at the dealership, and it will increase the velocity of the entire industry,” he says. “Which means we could bump up the volume to 17 million or 18 million units a year.”
Increasing business industrywide simply by making consumers happier with what they’re experiencing?
You can reach Lindsay Chappell at email@example.com.