New Autorola tool reduces stock days, improving dealer profits

How long does a car stay in a dealership? For the dealer, the answer to that question could be the difference between profit and loss.

“And yet this issue has never been properly addressed by any IT solution on the market – until now”, says Brian Madsen, director of Business Process Reengineering at Autorola. The leader in online vehicle remarketing has developed Dynamic Inventory Management (DIM), a tool to optimise vehicle flow, and ultimately enhance profitability.

“The business proposition for dealers is that vehicles sold at a profit have to compensate for vehicles sold at a loss. With margins per vehicle relatively low, the management of the time from stock to market is a key element to maintaining profitability”, says Madsen.

DIM does this by combining the dealer's workflow management with Autorola's own market intelligence to produce, as the name indicates, a dynamic, optimised management of the dealer inventory. “Our system 'speaks' with the dealer's existing admin system to monitor the flow from in-stock to sold. Dealer employees can continue working with their familiar systems; they don't need to make any major changes to their routine”.

What does change, is the clear overview DIM produces of various categories of cars in stock. Brian Madsen: “

A number of gateways and KPIs can be set to monitor the vehicles that need the most attention. They can be presented in a dashboard that is easy to view and use. For example, the dashboard can present cars in stock without a workshop order, or with a workshop order more than ten days in the future, or come back from the workshop but not yet online. Or even cars that are slow-selling in the market at that particular time, cars without price change more than 30 days, cars with less than 5 photos or without photos, and more. Based on these data, managers can focus on cars that need priority attention, thus reducing the time to market”.

The system, which was launched last year, already operates at a number of Autorola's clients, and there are a number of case studies to back up its effectiveness.

“One case study involves a dealer group that processes 25,000 used vehicles per year. DIM managed to reduce the average time to market by no less than ten days. Keeping in mind that a stock day costs about €30, that amounts to a cost reduction of about €7.5 million for that particular client”.