A report by eMarketer revealed that the growth rate of automobile sales and auto part sales in 2020 would decrease by 0.3%, according to digitaltech.com. Competition in the automotive industry is becoming tougher each day, which makes it challenging for auto dealers to grow their business. With the introduction of more innovative car models in the market, the entire sector is changing rapidly.
For this reason, dealerships should not only implement marketing strategies in their trade but also have a good knowledge about how businesses evolve. Understanding each stage of business growth and preparing in advance for challenges will help you to never let your business growth slow down, regardless of the industry’s current statistics.
Start-up or Introductory Phase
The start-up stage is the most exciting but also stressful for every business. Start-ups face many challenges at this stage, but your focus should be finding and acquiring clients, taking a position in the market, and managing your finances. In the automotive industry, it is all about promoting a product and highlighting aspects that make it unique. For example, you may talk about tech features like a vehicle’s voice recognition, infotainment, fuel efficiency, and remote control to attract clients.
Early Growth Stage
During the growth or survival stage, create a realistic marketing budget. Ideally, you will have high profits at this point, but the competition will also be tight. Consumers will purchase automobiles in large numbers, and more competitors will access the market. Meanwhile, carmakers are investing more in brand recognition rather than product features, making cars easily accessible. Marketers will market new brands as trendy and display them in auto shops and related areas. As a result, consumers will have the opportunity to start comparing vehicles by model and features, based on their own preferences.
Rapid Growth/Expansion Phase
At the expansion phase, you are confident that your hard work is finally paying off. You might even have plans to sell or scale your business. Since you are likely to create room for investors and shareholders, it pays to have accurate and updated financial records on hand. Keep in mind, expanding your business is still optional at this point. Nonetheless, you will face operational challenges at the expansion stage, including poor planning and execution, creating and sticking to a budget, additional training, and employee retention.
Once you’ve surpassed the expansion stage, your business will slowly continue to mature. At this stage, you will already have a dominating identity in the industry. The maturity phase allows you the opportunity to fall back into the expansion stage or find an exit plan.