Retail prices have soared as industries across the country fight supply-chain woes, and retail automotive is no different. According to recent Cox Automotive findings, the rapid rate of vehicle appreciation has started to slow down, with analysts expecting some wholesale value depreciation to return. With the used vehicle market in such a transitional state, Dale Pollak, founder of vAuto and executive vice president at Cox Automotive, shares with us why this is a critical moment for car dealers.
Recently, Pollak published an article titled, “Early Signs of a Market Moving to More ‘Normal’ Dynamics.” In it, Pollak discusses intelligent inventory strategies that car dealers can adopt to navigate a transitional market. In March and April of this year, wholesale prices and demand were very strong, and while Pollak is confident that these numbers will stay strong, he says by July and August, they will be much closer to the normal range. With that in mind, Pollak is calling for a different strategy in stocking and we move closer to Q3.
“Now that we’re in this third quarter of crazy, the moderation phase I’ll call it, I think calls for moderation in our appetite to stock ahead of our rolling 30-day sales.”
The key here in Pollak’s opinion is that dealers don’t want to end up with an abundance of inventory in July and August, especially when it means purchasing that inventory for top dollar. While there is money to be spent by consumers, tax refunds and stimulus checks have by and large been cashed. So, the initial surge that the industry felt in March and April will level out and plateau without that additional influx of cash.
For more great insight and expertise from Pollak, be sure to watch the complete interview above.
Dale Pollak’s career in the automotive industry spans more than three decades. He began his journey as dealer principal for a Chicago-based Cadillac dealership, where he served for 13 years. Prior to starting vAuto, Pollak helped build and lead Digital Motorworks, Inc., to its successful acquisition in 2002. vAuto was founded in 2005 and acquired by Cox Automotive in 2010. Dale has also written five books, the latest of which, Gross Deception, was released last year.
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