Do the Math on Your Vehicle Sales Numbers

I hate math; I guess that makes me a right-brain person. But sometimes, simple math can be very enlightening in the world of selling cars. The following is good way to calculate how many new vehicles you should be selling at your dealership.

 

It’s not super scientific, but it is enlightening and it can help you create realistic goals and help you understand where to get the additional sales. Try this math on your dealership:

 

·         What is the population for your market?

 

·         What is one percent of that population?

 

·         What is your car make’s percentage of US sales per year? (see chart) Pick from the rough numbers below:

 

Make

Percentage of US Sales

Ford

15%

Chevy

14%

Toyota

13%

Honda

10%

Nissan

7%

Hyundai

5%

Dodge

4%

Kia

3%

GMC

3%

Jeep

3%

Others

1%

 

Here is how this works: Take your market population and figure one percent of that population. One percent is about how many people are in the market for a new vehicle at any given moment. We know that historically, this one percent of buyers will split their purchases by brand according to the brand percentages above. In other words, 15 percent of the buyers will buy a Ford.

 

The way you figure your dealership numbers is to divide by the number of dealers who sell your make in your market.

 

To show an example let’s say your city is Autoville, population 500,000. One percent of 500,000 is 5,000. So, 5,000 people will buy a car this year in Autoville. 5,000 divided by 12 months equals 416 cars per month. If you are a Ford dealer, you know that 15 percent of the cars sold will be Fords. Fifteen percent of 416 cars is 62 cars. That’s how many vehicles, per month, will be sold by Ford dealers. If there are two Ford dealers in the market, on average each should sell 31 cars per month.

 

If you want to sell more than 31 cars per month, you will need to steal some sales from the other Ford dealer in town by out-marketing him. You are probably not going to steal sales from other makes, because those percentages don’t change much year to year.

 

So, if you see the conclusion here, it is that your main competitor, in your market, is the guy that sells the same make you do. If you’re a Ford dealer, your main competitor is the other Ford dealer. You must out-market him. If he is beating you currently, he is out-marketing you.

 

I learned this useful formula from auto marketing veteran, Scott Toland at The Marketing Academy. Try it in your market and see if you are in the ballpark and getting your fair share of sales.

 

 

 

 

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