Bad Year Brought Good Changes

The year 2009 was a downer but it ushered in major reforms within the auto industry, says Mitch Golub, CEO of Cars.com, an online marketplace.

In that sense, it was a good year, he says.

Otherwise, it was pretty much a year from economic hell, when vehicle sales plummeted, two big auto makers went bankrupt and thousands of dealers lost their franchises.

But then there’s the silver lining.

“In a way, 2009 was a great year because things happened,” Golub tells WardsAuto. “People did needed things, overdue things they wouldn’t have done if all was well.

“They looked at the auto industry and at ways to change it for the better.”

Some of the changes were fundamental.

Auto makers right-sized their operations, adopted a disciplined approach to production and returned to profitability. Dealers got their stores down to lean fighting weights, focused on all operations and stepped up use of the Internet to draw customers and seal deals faster.

“The challenged dealership is the one where the salespeople stand around and look out the window waiting for customers to show up,” Golub says.

“Contrast that to using Internet marketing, working with a customer online and closing a deal in 15 minutes because you have a well-informed person who knows what he or she wants from being on the Internet.”

Cars.com research indicates online vehicle shoppers are growing in numbers. They also are more drawn to website inventory that includes photos, videos and creative descriptions of listed vehicles.

“A backward dealer won’t have photos or videos and won’t tell the story of the car in the copy,” Golub says. “That dealer also is not stocking cars consumers want, not handling incoming phone calls well and not treating the Internet customer like a regular customer.”

A few years ago, he predicted that the days were numbered for dealers who failed to “get” the Internet. Many of them indeed are gone, victims of the high dealership mortality rates of 2008 and 2009.

“The good news is that a lot of dealers got it and are still around,” Golub says. “Sometimes the industry focuses too much on dealers who don’t get it. But that number is becoming smaller.”

Industry conventions and conferences are full of dealers who know how to use the Internet to boost vehicle sales, he says.

“They’ve embraced things such as transparency,” Golub says. “A while back, some of them were reluctant to give pricing information online. Now, they realize that if you don’t, someone else will.

“Only a few stubborn dealers keep insisting on doing things the old way.”

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