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“That’s why we started TonkinGreen.com.” says Brent Hillyer, director of eBusiness for the Ron Tonkin Family of Dealerships. “We wanted to give consumers a place where they could learn about hybrids and other alternative fuel vehicles, which gives them the information they’re looking for and makes sure we’re top of mind when they’re ready to buy.”
SUV’s have traditionally had better profit margins than smaller, more fuel efficient models. Today, that trend has reversed and many dealers who used to rely on the large profit margins of SUVs have been scrambling to clear their lot of giant SUVs and replace them with the more efficient, gas sipping cars that their customers are demanding. This is an unfortunate situation for many dealers who are being forced to sell their stock of SUVs for thousands of dollars less than they did just last year. This is a painful experience for dealers who once enjoyed healthy profit margins and booming sales from selling SUVs.
There is, however, a bright spot on the horizon: hybrid vehicles. In much the same way that SUVs commanded a premium in the past, now it is hybrids that receive a premium. In fact, according to Edmunds.com, hybrids on average cost $2500 to $3000 more than the same model without a hybrid engine.
Dealerships such as the Ron Tonkin Family of Dealerships in Portland, Oregon who started focusing on hybrid and alternative fuel vehicles early are starting to see the rewards now. When Ronald B. Tonkin tapped Jon Geffen to head his new complete alternative fuel vehicle division in 1995 there were more than a few skeptics. My, how times have changed.
“When we first saw the hybrid cars people may have referred to us as the Starbucks latte drinking, Volvo driving people,” explains Geffen, “but it’s changed. It has changed to a mainstream business and people are really talking about fuel usage.”
There is a lot of growth potential for hybrid auto sales. According to Brent Hillyer, “It’s just a matter of inventory these days. If we could get more [hybrid] vehicles in inventory we could sell more vehicles.”
The popularity of hybrid vehicles along with the premium prices they command makes them an attractive proposition for dealers. The kind of consumers that purchase hybrids, however, also deserves closer examination.
It is no secret that the purchasing power of Americans is declining. Falling home prices mean that many consumers have lost much of the equity in their homes and inflation is driving up prices across the board. In this kind of situation, people will be wary of big purchases, such as a new vehicle. Hybrid owners in general, however, are wealthier than their non-hybrid owning counterparts. According to Scarborough Research, 42 percent of households that own or lease hybrid vehicles have an annual income greater than $100,000—more than twice the national average.
With many hybrid owners making two times the national average or more, you not only have the opportunity to sell them a vehicle on which you can make as much profit as you used to on SUVs, you can increase the amount of money you make per vehicle by selling them accessories, but you have to carry the accessories hybrid customers want.
The study by Scarborough Research finds that hybrid owners more active and engaged in outdoor sports. In fact the study shows that hybrid drivers are three times more likely to ski, two times more likely to hike and backpack, and 20 percent more likely to play golf than consumers who drive regular, internal combustion engines. This information should give you some insight into the kind of accessories that these consumers want.
People who drive hybrids are not looking for the same accessories as the endangered SUV buyers. Unlike SUV buyers, they don’t want “flash and bling.” So put away that catalogue with the low profile rims and chrome plated bumpers. Hybrid consumers are a different animal, these are people that appreciate the outdoors and they want after-market products that will help them get there.
These consumers don’t worry about getting looks cruising around on Friday night; what they care about is getting their snowboard to the pass, in comfort, and without getting lost. So stock the accessories they want. For example, since they spend a lot of time cruising to camping and hiking spots that might not be on a regular map, why not offer them a GPS system that helps them get to their camping spot faster without spending time searching down dirt roads that don’t show up on most maps. Another great idea is roof racks, such as the kind that Thule and Yakima make. After all, what good is making it to the river if you can’t bring your kayak along?
With gas prices climbing, selling more green vehicles could be just what you need to bring the green back to your profits. You can sit there staring at the SUVs on your lot and wish they still brought you the same profit they did a few years ago, or you can bring your dealership into the twenty-first century by stocking your lot with high-margin, in-demand hybrid vehicles and watch your profits grow. As Brent Hillyer puts it, “Make no mistake five dollar [a gallon] gas turns into a lot more green deals.”
This article featured in Dealer Marketing Magazine Sep 2008 issue
Article Source: http://www.articlemotron.com
Hybrids To The RescueWritten by Michael Bowen, As featured in Dealer Marketing Magazine Sep 2008 issue
Tags: Articles Automotive auto automotive alternative fuel vehicles hybrid vehicles auto dealer dealership sales
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