Auto Dealers Are Survivors

On an almost daily basis, I speak with auto dealers across the country and hear the steps they are taking to deal with this current economic downturn.

Yes, there are challenges and yes, in my opinion, there will continue to be challenges throughout this year. But challenges bring opportunities; opportunities that make us stronger. As a mega-dealer recently said: “The good get to great during the toughest of times.”

Let me tell you about three dealers I spoke with recently.

One dealer says he was glad that, during the past couple of years, he had taken the tough steps necessary to get his overhead in line with the organization's current gross-profit production. Because of those actions, his net is actually better than during the same period in 2007.

The second dealer says his getting into the lesser expensive used-vehicle market last year is paying dividends and has allowed an increased net this year.

The third dealer says his focus on driving customer-pay service department business into his three dealerships has helped offset the decline in vehicle sales. That service business, coupled with a focus on expense control, has resulted in an increased net in all three stores.

There are hundreds, if not thousands, of success stories like this in our business.

Yes, most of us are heavily dependent on the new-vehicle franchise for many reasons, but a downturn in new-vehicle sales doesn't necessarily translate to a downturn in net profits.

It doesn't if you have been:

We have just completed and compiled the first quarter 2008 NCM All-Group results. For comparison purposes, following are selected first quarter 2008 operational statistics from our NCM database: This isn't an easy business, but car dealers are survivors. Not only will we survive during these economically challenging times, we will get better. Knowing this industry as I do, getting better is what we do best and enjoy doing the most.

Good selling!

Tony Noland is the president and CEO of NCM Associates, Inc. He is at [email protected].

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