Racing Southwest

I have been in the automotive business for almost 10 years and an autophile (someone obsessed with cars) for as long as I can remember.  Having worked in a variety of jobs and with Domestic, Japanese and now a German manufacture, I have seen quite a range of philosophies when it comes to how to treat customers, what the priorities are, and of course profit. It is no surprise that with the dramatic downturn in the economy those dealerships that represent the “old way” of doing business are having the hardest time staying afloat.  To clarify what I mean by “old way”, these are the dealerships that thought it was better to get the sale at any cost and take the customer for everything.  The dealerships where there was no focus on having a repeat customer in three years because they bought a good car at the right price, not someone who was taken advantage of to show a big profit.  But it’s not just about how you’ve treated your customers in the past it’s about how in-touch with the market now.

After a recent trip to the Las Vegas auto auction one of my colleagues noted that there the prices on pre-owned vehicles was soaring.  Who would’ve thought a time would come when people were more interested in that off lease, slightly used vehicles than that intoxicating sensation of driving off in a brand new car?  Well the fact is that those that are getting it right are focused on where the market is.  We need to rethink the strategy of the business to make it something people want to get involved in and right now the people are speaking loudly they “don’t want to pay the depreciation, they want the transportation.”

The good old days of fresh new cars driving down the road are going to have to be just that for now or will they?   Is it a good sign that prices are starting to come up on used vehicles?  In my experience it is the first time we can see that the market is aligning with what the people want; when it does that it moves the most units.  This also means that new car sale that dealerships are desperately going after are closer to happening because they will have a more valuable trade to not only the dealership but the customer as well.

I predict that if we hold to our plan and focus on the improvement of the vehicle prices we will be able to improve and being to stabilize the overall economy in the dealer body.  This is just the start of many other things that needs to happen including the bankruptcy of General Motors….but we’ll talk about that some other time.

“Don’t pay for the depreciation when you just want transportation.”