Tag Archive | sales 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.   

Overcoming Objections

How many times have you asked the customer to buy – they give you an objection – you handle it and they still fo not buy.

Frustration – waste to time – so what do you do?

You did not confirm it was the REAL Objection, that it was the TRUTH. You left this step out.

That is what this technique will teach you. By using this technique you will stop wasting time answering objections that were excuses – “get-a-way” stories or “little white lies” customers use to not buy at this time.

Sharing techniques with automobile salespeople how to sell more vehicles.

Recently dealerships have learned that Owner Retention has been neglected over the past years and 50+% of there customers are leaving and going to independent garages after the vehicles are out of warranty putting repeat sales at jeopardy.

NADA statistics show that if customers are having their vehicle serviced at the dealership 70% of the time they will purchase again from that dealership. When having their vehicle serviced elsewhere, that number falls to 35%.

One of the biggest problem areas is with Orphan Owners. These are customers that purchased from the dealership and the selling salesperson has quit and not following up with these customers.

In this video, Scott shares proven techniques on how to profitably follow up with Orphan Owners and make additional sales to them as well as selling additional vehicles to a salespersons current owner base.

Working with a “new” salesperson to get started faster.

Joe is new at selling vehicles, less than 6-months in the business.

Scott works with him 1-on-1 helping him address the challenges new salespeople face but with social media, proper techniques handling orphan owners they feel Joe can get to averaging 15 units per month in no time.

Helping a 20+ unit per month salesperson get to 30 units per month

Julie has been selling cars in Columbus, Ohio for 7 years and consistently sells 20+ units.

Scott works with her with email blasts, social media, targeted automated CRM usage for her personally to get to that 30+ per month.

Julie sells 20_ units per month – listen to her comments

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.