Fifth-Gear Sales After setting a new, all-time light vehicle sales record of 17,470,659 units for 2015, the US auto market did it again for 2016, with a total of 17,539,052 light vehicles sold, although it was just 0.3% more than 2015. Despite the new record for 2016, the Big Three US automakers and Toyota all posted red numbers for the year: GM, -1.3%; Ford, -0.1%; FCA/Chrysler Group, -0.4%; and Toyota, -2.0%. Nissan had the biggest gain, at +5.4%. 2017 started slower than 2016, with a 1.9% decrease in January’s total units, compared to January 2016. The SAAR, or seasonally adjusted annualized sales rate, was 17.57 million units, aligning with J.D. Power’s prediction of 17.6 million units for 2017.

Domestic Dealerships Are Biggest Revenue Generators According to the National Automobile Dealers Association’s (NADA) Average Dealership Profile, the average US dealership generated total sales of $54.27 million for the period, January–November 2016, a 3.4% increase over the same 2015 period. Of the four dealership categories in the Profile report, domestic dealerships had the largest increase, or +6.6%, with mass-market dealerships second, at +5.2%. Import dealerships had a small gain of +0.4% while luxury dealerships declined 5.0%. Total new vehicles sales for the average dealer for the January–November 2016 period increased 3.0%, with increases for domestic and mass-market dealerships, at 7.4% and 4.9%, respectively. Luxury dealerships declined 6.2% and import dealership, 0.8%.

Truck Sales Keep on Truckin’ The Ford F-Series regained its premier position among truck brands during 2016, with a 5.2% increase to 820,799 units. The RAM pickup and the Toyota Tacoma had larger increases, at 8.7% and 6.7%, respectively, but sold many fewer units. Total 2016 truck sales increased 5.9%, with small/midsize models increasing a spectacular 25.5%, and full-size models a more modest 2.7%. The Ford F-Series continued its positive run into 2017, with January units increasing 12.5%, compared to January 2016. The Chevrolet Colorado also did very well during all of 2016, at +28.8%, and January 2017, at +16.4%.

TV Advertising Drives Vehicle Sales TV is clearly automakers and dealers’ most-valuable advertising medium, which was proven during Super Bowl LI when Dealer.com, which operates more than 60% of dealership Websites, reported an 83% increase in total visits. According to Autotrader, the Lexus LC500 had the highest increase in search traffic following Super Bowl ads, or 4,700%; followed by Buick Cascada, +4,175%; Alfa Romeo Giulia, +2,628%; Kia Niro, +789%; and Mercedes-Benz AMG GT, +673%. During December 2016, Chevrolet, Ford and Toyota were the top three broadcast TV primetime advertisers. Toyota and Ford were third and fourth in total ad minutes during NFL broadcasts and Kia, Honda, Chevrolet and Dodge were top-10 NBA advertisers.

Winning the J.D. Power Sweepstakes According to the J.D. Power 2016 Vehicle Dependability Study, the Buick Verano was first in the compact-car category, the Chevrolet Malibu was first in the midsize-car category and the Buick LaCrosse was first in the large-car category. J.D. Power’s 2016 U.S. Customer Service Index reported that owners ranked Audi first in dealer service satisfaction for luxury brands while MINI was first in mass-market brands, followed by Buick, GMC, Chevrolet and Hyundai. According to the J.D. Power 2016 U.S. Sales Satisfaction Index, 5 of the 10 dealership processes that relate to negotiating the deal had the greatest effect on sales satisfaction. These included providing straight answers and not pressuring customers.

More Car-Buying Steps Are Online At the 2017 Automotive News Retail Forum, Mark O’Neil, COO of Cox Automotive, said approximately 10% of “the auto industry’s transactions could be online by 2019.” AutoNation Express transacted 30% of its new-vehicle sales online during January 2017. According to a January 2017 Automotive News article, 10% to 20% of dealers have software that allows them to do an electronic vehicle transaction to the point of delivery, as some state laws require physically signed documents. Some dealers think a complete online transaction may still be years in the future because of the need to value a trade-in and process financing. Many are also fearful of losing finance and insurance profits, although purchases through iPads are popular.

Advertising Strategies To improve service, parts and body shop revenues, suggest that luxury dealerships provide “luxury-style” incentives to attract customers, such as a gift card or special offer in partnership with a local high-end wine shop. With the average age of vehicles on the road at almost 12 years, offer an extra incentive to any customer who trades a vehicle 12 years or older for a new 2016 model, which will help clear older inventory. If making the consumer-salesperson connection prior to a dealership visit is so important, then feature a salesperson who received a stellar online review with his or her customer in a percentage of TV spots.

New Media Strategies Partner with a local animal shelter to help increase adoption with an online promotion that features specific animals on the dealership’s Facebook page and free training or pet food with the purchase of a qualifying vehicle. For dealerships that sell electric vehicles, and will sell more during the future, post information on the dealership Website and social media pages as additional public-charging stations become available locally. Incentivize truck and/or SUV customers with camping gear or gasoline gift cards to post photos and videos of their family visits to local and/or regional parks, forests and campgrounds and outdoors activities to promote these venues.