Lotlinx, a VIN-specific data company for inventory management, announced results of its latest industry survey, which took the pulse of today’s auto retailers in understanding how they are managing inventory carryover strategies, and where they are seeing the greatest challenge with markdowns as it relates to aging inventory. 

Lotlinx commissioned an online survey and presented it to more than 2,500 dealers across the U.S. during August. Below are key findings from the data:

According to the survey results, the majority of dealers see the greatest inventory challenges because of difficulty in moving older models (56%), followed by limited dealership space and increased holding costs.

The majority of dealers (18%) manage inventory carryover with price markdowns, dealer trades, and extended warranty offers, followed by 16% conducting aggressive marketing campaigns. In fact, 40% said they execute price markdowns on a weekly basis. However, many dealers see great challenges with markdowns, and more than half (53%) said they receive pressure from manufacturers, 52% said competitive market pressures, and 43% said brand devaluation.

The effectiveness of markdowns may be misleading since roughly a third of dealers said markdowns spur an increase in VDP views only 25% of the time, and 19% of dealers said it never spurs an increase in VDP views for a specific vehicle.

The survey showed that only 9% of dealers are leveraging AI to better manage markdowns, but nearly half of dealers (46%) say AI will impact their business the most for inventory management in the coming years.  

“The challenges faced by today’s auto dealers in managing inventory carryover risk levels are compounded by outdated practices and underutilization of advanced technology,” said Jason Knight, CEO of Lotlinx. “By embracing AI and other sophisticated tools, dealerships can completely modernize their inventory strategies, reduce risks, and enhance profitability.”