CompetitorPro, the first competitive intelligence software built specifically for auto dealerships, reported that December dealership performance metrics signaled caution as we move into the new year:

• Consumer engagement on dealership websites softened, despite record vehicle sales in December.

• Widely predicted weaker car sales may be upon us.

• Dealership inventories of new and used vehicles shrank per store, while sales per dealership increased for both new and used vehicles.

"It's a healthy sign that dealers were able to reduce inventories of new and used vehicles on their lots, in anticipation of a softer Q1 2017," said Steve Greenfield, founder and CEO of CompetitorPro.

CompetitorPro is the auto retail industry's first competitive intelligence solution, providing automobile dealers with actionable, in-depth performance metrics on their top competitors.

"With the record-breaking level of new car incentives driving consumer demand, car sales are likely to start to slow down in the near future," he said CompetitorPro's analysis indicates. "This is supported by the fact that we're seeing softening consumer engagement metrics across franchised dealership websites."

CompetitorPro will provide NADA '17 attendees a free analysis of how they compare against their top local competitor. Visit Booth 5607 during January 26-29 at the New Orleans Ernest N. Morial Convention Center. Visit http://www.competitorpro.com for a demo.

Key web metrics
CompetitorPro's analysis of over 20,000 franchised dealership websites shows that consumer engagement metrics softened in December:

• Average website visits to dealer websites continue to move downwards, averaging 1.64K, down 12.8% versus November

• Average bounce rate was 21.0%, up from 20.0% the previous month

• Average page views per visit was 3.36, down from 3.46 in November

• Average website visit duration was at 1 minute, 28 seconds, down from 1 minute, 38 seconds the month before

Weakening website engagement in December may mean we see a softening in new and used vehicle sales for dealers in Q1 2017. Research shows that consumers typically spend an average of three months shopping online before they buy a vehicle, although consumer traffic to dealership websites is closer to their date of purchase.

Other industry sources also point to shifting short term market dynamics.

AutoWeek reported that new car sales in December hit a record high, driving the seventh straight year of sales gains. Last year full-year sales came in at 17.5M cars and light trucks. The seasonally adjusted annualized sales rate in December hit 18.38M, the highest of 2016, and the fifth-highest SAAR of all time.

OEMs have their new car incentive spigots wide open. ALG estimates that the average incentive on new vehicles increased 20% last month to $3,673 per vehicle sold.

For used cars, Edmunds estimates that December was the highest sales month of the year, beating December 2015's count of 1.1M used vehicles sold. The SAAR for used-car sales for 2016 sits at 37.9 million units.

Industry analysts are cautiously optimistic about vehicle sales in 2017, but few (if any) are forecasting higher overall sales. Peaking vehicle sales is supported by weakening consumer engagement on dealership websites.

It's worth noting, according to CompetitorPro data, the large variability of individual dealership performance across these consumer engagement metrics:

• The top 25% of dealers experienced average website visits of 29.3K per month, compared to the industry average of 1.64K

• The bottom 25% of dealers experienced average website visits of 149 per month

• Top performing dealers are experiencing average page views of 10.8 per visit, and average website visit duration of 9 minutes, 52 seconds
  

Dynamics driving sales efficiency
An environment of increasing sales with decreasing website engagement metrics is driving more efficiency — taking fewer website visits to yield a sale:

• The average dealership experienced 14.5 website visits per vehicle sold, compared to 16.8 website visits per unit sold the month before

• The average dealership experienced 9.5 visits for the average unit held in inventory last month, compared to 8.5 visits the month before

• Finally, there is a wide difference between how some of the large dealership website vendors are performing for dealers:

Dealer.com

• Average website visits of 2.9K per month

• 20% bounce rate

• Average page views per visit of 3.6

• Average time on site per visit of 1 minutes, 39 seconds

CDK Global

• Average website visits of 1.7K per month

• 20% bounce rate

• Average page views per visit of 3.0

• Average time on site per visit of 1 minutes, 15 seconds

DealerOn

• Average website visits of 5.7K per month

• 19% bounce rate

• Average page views per visit of 3.8

• Average time on site per visit of 1 minutes, 50 seconds

"We're thrilled to be able to bring this level of transparency to helping dealers benchmark their website performance," said Greenfield. "Dealerships now better understand how they perform relative to their competition, enabling more informed conversations with both their dealership website vendors as well as their marketing agencies.

"At CompetitorPro, we're a big believer in bringing actionable insights to a dealer's operations. Despite having access to an overwhelming amount of data, the industry has a long way to go towards providing dealerships with comparative metrics versus other dealers — so they know exactly where to focus to improve their operations," Greenfield said.