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Microchips, Auto Sales and Emergency Management

Adapting to the reality of the situation.

OK, so I like cars. That is the hook that started me reading the article below. I’m also familiar with the microchip shortage that is plaguing many different industries — autos being one.

My purpose of sharing this article is to have you consider how to react to different situations. Some in the auto industry are likely throwing up their hands and saying, “We don’t have any cars to sell!”

Or, what can be done to meet this special time in history? As illustrated below, there are lots of small things that can be done.

One last footnote before you read the piece. The average car can have around 36 microchips. A Tesla can have well over 1,000.

Redline Automotive by Ryan Matejka

The global microchip shortage has had a serious impact on the automotive industry over the last 2 years, and the pandemic's effect on supply chains have turned the scarcity of inventory into a bigger challenge than many expected. While there’s no definite timeline, analysts say that the normal supplies of vehicles we’re used to aren’t likely to return until the end of 2022, perhaps even into early 2023.

In order to successfully navigate this rapidly-changing and difficult landscape, dealerships will need an intelligent and creative long-term plan to keep sales and customer interest high. With over 15 years of experience working directly with auto dealerships of every size, Redline put together some recommendations to help dealerships grow and succeed through 2022 and beyond.

Plan Ahead and Be Proactive

The chip shortage isn’t going away anytime soon and even when it does it will take time to build inventory levels back to new-normal levels. Dealerships need to think ahead about inventory needs and potential marketing strategies that will extend customer reach. In many cases, this will require thinking outside of the box and trying new things - but that’s the fun of working in the auto industry!

The first thing to keep in mind is this: when leads are low or inventory is scarce, it can seem like the best move is to pull back on marketing efforts. However, the opposite is actually true. In fact, recent forecasts show dealerships are likely to spend $9.4 billion in 2022 on advertising and marketing, an increase of 8.8% compared with 2021. That’s your competition increasing their spends to acquire more customers, meaning any savvy dealership should consider doing the same to stay competitive. Keep in mind, the best way to get affordable inventory is to buy it from a customer who in turn is buying one of your vehicles.

Creativity Counts

There are also a few ways in which dealerships can be creative in acquiring new inventory. One easy option is to be aggressive with both pricing and disclosure of older models to make way for the new ones (especially since we don’t know when newer models will be rolling out ready to sell like they used to). When you’re trying to sell used cars effectively and competitively, it’s also a good idea to be as upfront and clear as possible about any existing damage on each vehicle so shoppers know what to expect.

Dealerships can also look into expanding their service options to keep customers engaged and coming back. Providing lots of detail during the buying process on recurring maintenance options your dealership provides can help them return and become loyal customers for everything from oil changes to major parts repairs. Creative approaches like these can help dealerships stay ahead of the curve and continue to succeed in the ever-changing automotive market.

One other point on expanding: there’s solid data from that shows close to 10% of recent auto buyers drove out of state for the purchase. Out of that group, almost 20% drove 50 miles or more (13% even drove 150+ miles). So consider this when you’re planning your marketing efforts and messaging - your target audience likely expanded much further than you might think in the last 2 years.

Embrace the Digital Space

Digital marketing platforms are a powerful tool for dealerships looking to connect with customers in today's market. By using targeted ads and social media campaigns effectively, dealers can reach a wider audience than ever before. In fact, a recent study found that nearly 1 in 4 auto buyers consider a dealership’s social media presence and content before buying a car. And when it comes to ads, the same study found that 66% of car buyers who saw an ad on Facebook clicked on it, a 33% increase from 2014.

Effective digital marketing requires timely and relevant content - so make sure you're always keeping up with the latest news and trends. Use social networks like Linkedin, which largely focuses on business news. Try following a few major news publications in the automotive space and you’ll have easy access to emerging trends and new ideas.

When it comes to digital platforms, especially social media, keep in mind that the old adage “content is king” is as true today as it ever was. Car shoppers love to see lots of images (28-35 photos is the sweet spot for most vehicles) from multiple angles, and the higher the quality the better. Filters are good for selfies, but it’s a good idea to try to keep how you present your cars online as accurate as possible - shoppers can smell an embellishment from a mile away. 

Video is also a fantastic tool for dealerships because high-quality videos can help shoppers feel like they’re in the driver’s seat, or to view specific features of the car that regular photos just don’t show as well (GPS navigation and sound systems, for example). Videos perform especially well on social media, and they can also be embedded on your website and on 3rd party sites like and AutoTrader. (Pro-tip: check your current package, you may already be paying to display video on these sites. Maximize your ROI by sending per-vehicle videos wherever possible). Videos can additionally be hosted on Youtube to improve your site’s SEO ranking. Better SEO means more traffic, and that’s a win every time.

Keep Up With Your Engagement

One of the often-overlooked results of the chip shortage is an increasing uncertainty among car buyers, so it's crucial for dealerships to stay engaged with their customers and keep them informed of current developments. This can be done through regular communication channels such as email newsletters, social media posts, and consistently updating information on your site. Whatever method you choose, make sure it is consistent and engaging enough to keep customers coming back.

Especially for social media, it’s important to respond when shoppers ask questions or make comments on their recent purchases. Building a personality online can be difficult when you’re trying to run a busy dealership, but it’s very important if you want to keep customers involved and feel a strong connection to your brand. And the numbers don’t lie - recent research shows that even a 1% decrease in a dealership’s overall customer retention can mean the loss of the equivalent of 90 vehicle sales.

The Takeaway

Impact from the current chip shortage and vehicle inventory shortage may be around for a while, so it’s critical for dealerships to create a robust strategy to keep sales coming in. Make sure you’re keeping your “foot on the gas” when it comes to marketing, being creative when it comes to your inventory and services, and taking advantage of the ever-expanding digital landscape. If you remember to engage your audience regularly, you can keep interest high. In the end, this means more traffic to your site, more interest in your inventory, and more deals closed on the lot.
Eric Holdeman is a contributing writer for Emergency Management magazine and is the former director of the King County, Wash., Office of Emergency Management.