Tag Archive | Internet training

The “Real & Complete” story behind the “AUTO-CHIP” shortage

The chip shortage began when the COVID-19 pandemic began spreading throughout the United States in March 2020.  During the early phase of the pandemic, there was a massive shift of people who were required to work from home.  As a result of the workplace shift and the need to set up at homework stations, sales of PC’s, printers, LED screens and cell phones soared and significantly increased the number of chips needed by the electronics manufacturers to keep up with demand.  At the same time, auto manufacturers significantly reduced their production schedules as they forecasted that automobile sales would plummet.  Auto manufacturing reduced to a trickle of normal output, production was cancelled and the electronics industry, which was surging, swallowed up the chips no longer needed by automobile manufacturers.

The chip deficit was further complicated by two other events.  One of the largest chip suppliers in the world, Renesas Electronics in Japan had a fire at their chip manufacturing plant. Production was significantly affected and Renesas is still struggling to get capacity up to full production.  On March 23, 2020, the cargo container ship Ever Given, was traveling through the Suez Canal carrying 17,600 containers, had a mechanical problem, and blocked the Suez Canal.   It is estimated 20-25% of Ever Given’s containers carried supplies needed to make microchips, not to mention, blockading hundreds of additional container ships carrying much needed chip making materials.

With all of this going on, American consumers continued to purchase vehicles at a much higher level than forecasted by the auto makers.  As the cars continued to move off dealers’ lots, the auto makers contacted their suppliers in order to jump start production.  Unfortunately, the chips that would have been allocated to the car makers were already sold and promised to the electronics companies.  Additionally, the chip manufacturing process takes 6 months from start to finish and the few global chip suppliers are simply unable to keep up with demand. 

So, what started as a single issue impacting the chip shortage had rapidly become a sort of “Perfect Storm” for the chip Industry.  

How many microchips do you think are in the average vehicle? It ranges from 1,500 to 5,000 microchips in every automobile. The average vehicle has 2,600 microchips in it.

The pandemic has also impacted the used vehicle market.  When this pandemic hit, business travel came to a halt and crippled the car rental companies.   As demand for rental cars hit rock bottom, the rental car companies were forced to sell off massive amounts of their rental fleets to generate enough cash to survive.  In May of 2020 Hertz Rental Company went so far as to file for bankruptcy protection.  Hertz sold off 180,000 of its 500,000 vehicle fleet in order to pay creditors and keep afloat.   This was a common theme amongst all rental car companies.

In the summer of f 2020 leisure travel began to rebound to almost normal levels.  This caused a significant demand for rental vehicles, and the rental companies, having sold down their fleets were in severe need of inventory.   In normal times, the rental car companies receive new cars from the manufactures and dispose of older inventory at auto auctions.  These cars are then purchased by dealers and sold as used cars.  Because the rental car companies were not receiving new inventory from the auto makers, they were forced to purchase inventory from auto auctions in direct competition from dealerships, which caused used car prices to soar.  The continued resurgence of both business and leisure travel will ensure that consumers will pay record prices for car rentals.

Yes, there is a shortage of new vehicles. Yes, there is a shortage of used vehicles.  Yes, the price of new vehicles is higher. Yes, the price of used vehicles is higher. Here is the $64,000 question – When are things going to return to normal? And the next question: Is the market going to CRASH? I am constantly reading automotive articles and there are opinions on both sides. One says it should be back to normal in the next few months, and the next article says it won’t get back to normal until 2022. I have no clue. But it just seems that the automobile business is a very resilient industry that just keeps bouncing back. Here are a few examples of the industry bouncing back:

  • 1973 – 74 – the first oil embargo causing mass havoc to the industry 
  • 1978 & 79 – the next oil embargo which was in the wake of the Iranian revolution
  • 1979 – 82 – the Federal Reserve attempted to slow down the largest recession the US had experienced since the Great Depression. New car interest rates reached 18-20% while used car loans reached a whopping 25-27%
  • 2008 – a global financial crisis hit – forcing GM & Chrysler the need to receive a “bailout” from the U S government. – TARP – Troubled Asset Relief Program – GM proceeds to file for bankruptcy protection later that year and Chrysler eventually sells a large portion of their stock to the Italian auto maker Fiat to help them rebound.

The industry has had large challenges in the past and bounced back, and I feel it will do the same as we just put another chapter in our history books.   


July 1, 2018 – the 1st half of the year is in the books. Do you want the 2nd half to be the same as the 1st?

Creating a Game Plan, A Road Map, a definite Work Plan for the month is a way to design your outcome.

You examine your mix of sales, are their segments such as used trucks you may be missing opportunities? You look at the sources of opportunities – Floor/Phone/Internet Social Media/Repeat/Referral. You take into consideration the working days, the amount of opportunities you have for the upcoming month. These are factors we consider when we project for the upcoming month.


As you build your forecast, look for the opportunities you may have missed, maybe only 1 or 2 used and you feel a growth opportunity lies here. And, FORECAST in small increments, 10% over previous month. But remember, a GOAL is MANDATORY so whatever you forecast – you accomplish. Then the following month another 10% and then another 10%. By December you will have grown your sales by 60%. What would a 60 increase in sales do for your income?

If you have questions or would like a copy of my “Forecasting Worksheet”, call or drop me a note.

Scott Hembrough

Hembrough Business Systems * www.scotthembrough.com * www.scotthembrough.net

6633 Buckhorn Tr * Loves Park, IL 61111 * (815)978-5038 * hembrough.scott@gmail.com


What’s HOT with the Internet TODAY?

In the past 30 days, I have attended an Internet Conference in Las Vegas, viewed eight webinars and read in excess of 30 articles on “new and improved ideas”, techniques and products; all related to what’s working BEST with the Internet TODAY.

What is my conclusion? Everything is working, yet nothing is working. So, not to worry you – I do HAVE THE ANSWER.
First, let’s look at some of the latest statistics:

Here are some statistics you have probably heard just to confirm:

* 90% of the people shopping for automobiles are at one time going online and viewing things via the internet.
* Phone-ups currently are 4-1 over lead submission.
* The average person is visiting approximately 1.5 dealerships.

Now, here are some stats you probably did not know!


Day 1 – 14%
Day 2 – 18%
Day 3 – 12%
Day 4 – 6%
Day 5 – 4%
Days 6/10 – 14%
Days 10/30 – 19%
Days 30+ – 12%

Since I started specializing with the Internet, I have been teaching the importance of having a “long-term” schedule to identify and engage potential clients and I am still an advocate of that; however, I am changing my emphasis to the first 5-days, with an accelerated push at that time and then automating things, with just a couple of calls. Let’s consider the logic.


Day 1 – 67% 99% of Sold’s were contacted within the first 5 days
Day 2 – 19%
Day 3 – 8%
Day 4 – 2%
Day 5 – 1.5%
Day 6 – .5%

Then, the next question to come up should be what method is being used to ENGAGE there people? 72% of the people were contacted by phone and 28% were engaged via email. This tells me that strong emphasis needs to be placed in order to get the right person to speak with you on the phone. Question: “Does your first email response ask to have a telephone conversation for additional details? It should – even if the prospect did not provide a number, ask them to take the time to call – you will both be better satisfied!

So, considering the statistics and remembering that I told you I had the answer….. so here it is. THE ROAD TO THE SALE today, whether you want to admit it or not, starts online! How much time does your sales manager spend with your BDC, Internet Sales People, whomever you have responding to these opportunities? I was taught that the best management style in a dealership is performing “one-on-ones” daily with the salespeople, I still believe that, but if your main sales manager is not performing “one-on-ones” daily with your people responding to your Internet leads everyday you are missing opportunities. They should be making certain that multiple calls are being daily in the first five days in an endeavor to contact new leads Additionally, there should be at least four hours between attempts. Are they viewing the emails being sent? Are they discussing the messages being left? Are they monitoring how many out-going dials are being made everyday? If you are not doing these things daily, you are probably not selling 11% of the overall leads you get.



As a closing note…. I speak with dealers and managers who tell how expensive it is to bring someone in to train, help set these processes in place and setup schedules to follow and my question back is always: “How expensive is it NOT TO ENLIST THE ASSISTANCE OF AN INTERNET PROCESS SPECIALIST AND HOW MUCH NET PROFIT ARE YOU ALLOWING YOUR COMPETITORS TAKE AWAY FROM YOU WHO HAVE THE PROPER PROCESSES, PROCEDURES AND PHONE TECHNIQUES TO PROPERLY HANDLE TODAY’S CUSTOMER?”

Hembrough Business Systems Helps 50 Year Dealership turn things around

Scott Hembrough of Hembrough Business Systems worked with Cannon Auto Group in Lakeland, Flordia – a 2nd generation dealership that was struggling from bouncing back from the financial slow down the entire auto industry suffered from.

Scott helped with Internet, phone training, overall dealership processes and listen to the credit Danny Cannon gives Scott regarding the dealerships profitability.

Building A Book of Business

In this session we look at the benefits of creating a profitable follow-up system that makes money.

What to say

Who to call

When to call

What to write

All of the ingredients and techniques of putting together a Book of Business

New Salesperson gets help from Scott Hembrough

Like many new salespeople – Matt was thrown on the floor with that ole speech: “Go get em Tiger”.

Scott shared with Matt good fundamental practices with qualifying – building rapport with people – helping him get the people to like him. From their they began prospecting his friends, relatives, people he did business with – they knew that if Matt worked with people he knew he would build confidence fast.

And that is what happened. Matt sold 10 cars in his 1st two weeks and has been at the “top of the board” ever since.

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Hembrough Business Systems works with a “Seasoned Vet” Salesperson

Barry P. is a “Seasoned Vet” salesperson, the most challenging for a training to work with in a dealership. Many times they are set in their own ways. Most of the time the feel they “have a better way”.

Barry explains how he “resisted”, “fought” techniques Scott wanted to share with him. But in the long run he gave it a try. Now he credits four to five additional sales each month by  using the techniques Scott taught in his dealership.

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Hembrough Business Systems comments from Colin Giddings

Colin Giddings has been an automobile dealer for 20+ years. He has ben in the business for the good times and the tough times.

Over the past few years he has struggled attaining the numbers he felt his store was capable of generating. He hired Scott Hembrough to come in and help get the sales that constantly were just out of reach. October 2012 sale exceeded any month in 2012 and showed record profits that he hadn’t seen since 2006.

After viewing call Scott and have him exp0lain how the Internet played a significant roll in attaining his results.

Internet Manager comments regarding Scott Hembrough

JR Roney has been a BDC/Internet Manager for a number of years. Approximately 6 months before this video he started working with Scott and using his training techniques.

His appointment ratio has increased, his show ratio is up and ultimately he and his dealership are making more sales and money.

Hembrough Bus Syst TESTIMONIAL by Jered Shaw

Jered Shaw has been with Gladstone Suzuki for 11 years. He is now the General Manager and describes how working with Scott has not only benefited him – but the dealership and the entire sales and Internet Teams.