How an OEM Automotive Management Solution Tackles Performance Challenges

The relationship between Original Equipment Manufacturers (OEMs) and dealerships is typically one of interdependence. Dealerships rely on OEMs to provide a steady supply of vehicles, parts, and accessories to meet customer demand, while OEMs depend on dealerships to represent their brand and drive sales. Centralised OEM automotive management solutions play a vital role in managing the complex data generated by this partnership. However, the effectiveness of these systems can vary widely and their impact on performance can be significant.

Beyond supply, OEMs support dealerships through training, marketing, and other resources designed to help dealerships sell more effectively. They also provide financial incentives to dealerships based on their sales performance or other key performance factors, such as meeting specific customer satisfaction metrics.  With so many moving parts, maintaining consistent performance across a network of dealerships is no small feat.

Were you aware that from 2020 to 2021, the worldwide automotive sector saw a 12% decline in output¹, highlighting its sensitivity to external disruptions such as the pandemic? Enhancing preparedness and focusing on performance across your organisation can mitigate the effects of broader economic influences. This article examines proactive strategies to accomplish this and outlines key features to seek in a performance management system.

The Growing Need For an OEM Automotive Management System 

Overall, the relationship between OEMs and dealerships is mutually beneficial, with both parties relying on each other to succeed in the highly competitive automotive marketplace. In 2017, various OEMs were moving towards purely online sales, but in 2024 OEMs have come forward to acknowledge that an omnichannel approach seems to be the winning formula. According to ICDP’s research²:

“in 2017 roughly 3 percent of customers said they would want to buy a car completely online. When it polled customers again last year the number was the same. However, while 34 percent of respondents in 2017 said they wanted to buy a car completely offline but last year that number dropped to 17 percent.” 

This shift shows customers want to engage both digitally and physically during their vehicle-buying journey. This is just one example of OEMs having to take a flexible strategic approach to stay ahead. Our recent ‘5 Automotive Business Challenges That Loop Can Solve’ article explores further market developments impacting the industry. 

To ensure your network operates efficiently amid these changes, investing in dealership performance software can provide the solid foundations needed to adapt and thrive. 

5 Common Performance Challenges Faced by Automotive OEMs and Dealerships

OEM dealer performance management is not only about tracking figures and data. It also involves identifying trends, understanding customer behaviour, and staying ahead of competitors. However, several performance challenges can arise when it comes to communication between OEMs and dealerships, including:

1. Lack of Real-Time Information: OEMs often need help providing real-time information to their dealerships, especially when using static dashboards that don’t prompt action. This can impact the ability of dealerships to make quick decisions.
2. Inefficient Communication: Traditional communication methods, such as phone calls and emails, can be time-consuming and lead to decision-making delays. Additionally, important messages can get lost in the shuffle, leading to confusion, and missed opportunities. Any resistance to adopting digital tools can exacerbate the issue.
3. Data Management: OEMs need to collect, analyse, and manage a large amount of data related to the performance of their dealer networks. Different departments use disconnected systems and consolidating this is a challenging task without an efficient system.
4. Ineffective Sales Processes: Manual efforts in managing margin programs and pinpointing underperformance, coupled with inventory bottlenecks, result in inefficiencies. Centralised, real-time information can alleviate these strains.
5. Limited Feedback Mechanisms: OEMs often need help to gather feedback from dealerships regarding their products and services. This can make it difficult for OEMs to make informed decisions about improving their offerings.

How Loop Can Help Solve These Performance Challenges

Loop is a software platform facilitating communication and collaboration between OEMs and dealerships. Some of the key features that make Loop an effective solution include:

1. Real-time, Automated Data Sharing: Loop enables real-time data sharing between OEMs and dealerships. This ensures that both parties always have access to the same information, which can improve transparency and reduce misunderstandings.
2. Centralised Communication: Loop provides a centralised platform for communication, which can streamline decision-making and reduce the risk of important messages being lost or overlooked.
3. Effective Data Management: Loop offers powerful data management tools that enable OEMs to collect, analyse, and manage data related to their dealership network. AI within Loop supports the OEM and retailers through predictive analytics, quickly surfacing opportunities for immediate attention.
4. Efficient Management Tools: Loop offers tools that allow OEMs to minimise manual tasks in the sales process, such as tracking inventory levels, benchmarking dealer performance and automating margin programme calculations.
5. Feedback Gathering: Through an intuitive interface, Loop makes it easy for OEMs to gather dealership feedback. This can help OEMs identify areas for improvement and make informed decisions about improving their offerings.

Why Loop Stands Out as the Go-To Solution

Loop provides OEMs and dealerships with real-time insights into their operations. This allows them to identify areas of improvement and means that they can then take action to improve dealer performance. This, in turn, helps to enhance the overall customer experience and increases profitability for both dealerships and OEMs.

Loop provides a comprehensive software solution to address OEMs' communication and collaboration challenges with dealerships. By delivering real-time performance insights, fostering efficient communication, and enabling robust data-driven decision-making, Loop empowers OEMs to elevate dealership performance, reduce dispersion in the dealer network and achieve shared goals. Loop ensures you stay ahead technologically, with continuous enhancements tailor to the industry’s evolving demands. 

Contact Us to Learn More

Are you ready to transform your operations with a powerful OEM automotive management solution? Contact us today to arrange a call or demo to demonstrate how Loop can help you navigate business and performance challenges to achieve your objectives.

^{1 - How Auto OEMs Can Build A Resilient Supply Chain | BCG
2 - Volvo drops online sale target as digital-only goals get rethink}