As new vehicle inventory levels continue to recover from supply-chain driven lows in 2021/2022, it is crucial that OEMs and their agency partners understand if vehicles are selling efficiently or if they need a boost. Cloud Theory’s new automotive “Inventory Efficiency Index” reveals that automakers Kia and Lexus have gotten off to the strongest starts in the first two months of 2023.
What is Cloud Theory’s Inventory Efficiency Index?
Cloud Theory‘s “Inventory Efficiency Index” (patent pending) provides a previously unavailable supply and demand view of all makes and models, across all geographies, and in real-time so that key decision makers can confidently allocate precious marketing and incentive dollars or reallocate vehicles to where they have the best chance to sell quickly.
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The Inventory Efficiency Index measures the relationship between a make or model’s competitive supply situation and its market share. A score of 100 indicates that an OEM is getting its fair share of sales. A score above 100 reveals that an OEM is selling its vehicles more efficiently than average, while a score below 100 uncovers a need to raise demand to meet supply.
How is the Inventory Efficiency Index used by OEMs?
By understanding their Inventory Efficiency Index scores, OEMs and agency partners can:
- Take steps to boost demand for low scoring makes/models/geographies by increasing media or incentive spending
- Fund increased investment by reducing or reallocating spending from high scoring makes/models/geographies that are already moving well
- Reallocate vehicles from high supply/low demand geographies to ones that are in low supply/high demand situations
Kia, Lexus Are Off to the Strongest Start in 2023
Kia and Lexus led a group of eleven brands that had Inventory Efficiency Index scores of 100 or above.
Top Scoring Makes – Inventory Efficiency (January-February 2023):
- Kia (155.6)
- Lexus (154.4)
- Toyota (145.4)
- Land Rover (142.1)
- Honda (140.2)
- Subaru (126.1)
- BMW (123.8)
- Hyundai (115.3)
- Nissan (110.0)
- Chevrolet (103.5)
- Volkswagen (100.0)
SOURCE: PR Newswire