A Guide to Car Dealer Survival

People who look back at their careers often focus on the tough times, says David Robertson, executive director of the Assn. of Finance & Insurance Professionals.

They'll reminisce about what they did to get through the ordeals of economic downturns, and what they became because of those efforts, he says.

If that's the case, these current hard times will give people plenty to talk about in nostalgic musings to come.

The nation is in a recession, and automotive sales are way off. “But people are still buying and getting credit,” Robertson says. “There are opportunities for car dealers.”

Those prospects and how dealers can leverage them are discussed by Robertson and other auto-retail industry mavens at the F&I Management and Technology conference in Las Vegas.

Their comments are a recognition of reality, yet an exhortation to get the most out of all dealership operations, from new-car sales to used-car sales, from the service and parts departments to the F&I office.

“There are dealers hurting, and others who, while business is off, are doing pretty well,” says Robertson. “What are they doing?”

It can depend on the brand of vehicle they sell and the location of their stores, says Mark Mishler, CEO of Resource Automotive, a firm providing financial consulting and training services to dealerships.

“But at the end of the day, it's often a matter of how you operate your business,” he says. “If your customers are not buying a lot of cars, what are you doing to service their cars?”

Dealers should be creative and fill customer needs, says Peter Biscardi, president of NAC, an F&I product firm.

“Buyers are much more educated these days,” he says. “You can't trick them anymore. Show them that you care, that you want to help them and that you are not just there for yourself. Treat them like customers for life.”

A 3-point plan of action is offered by Alan Miller, senior vice president-sales for CAN Warranty Corp.: “No.1 Focus. No.2 Communicate. No.3 Avoid the tendency to beg people to buy from you.”

Modern technology — such as inventory control and customer-relationship management software systems — can help dealers do more with less, says Raj Sundaram, a senior vice president at DealerTrack Inc.

“Dealers, particularly domestic-brand dealers, need to get their inventories adjusted,” he says.

Successful dealers put customers first, while “maximizing every opportunity that walks through the door,” says Bruce Foster, director of F&I training for JM&A.

But he cautions about getting carried away doing the latter, especially if there's a mood of desperation at struggling dealerships.

“In this market, there are dealers struggling to keep their doors open,” Foster says. “The feeling to maximize every deal can lead to problems. Leverage opportunities, but don't be opportunistic. Don't rip off customers' heads.

“We'd be kidding ourselves to say there aren't real temptations in a market like this,” he adds. “But I want to be here when we come out of this. Dealers that take advantage of people can end up going out of business.”

Management responsibility is needed most and should be at its best “when things are bad,” Foster says.

Ethics plays a vital role in long-term survival plans, says Biscardi. “We know the right thing to do, and that's got to be instilled in the workforce. It's got to come from the top. Do that and you will still be around.

“I don't know why a dealer would want to roll the dice on his or her business, he adds. “Doing the right thing is simple, but sometimes people like to do the complicated thing.”