USE GOOD TIMES TO PREPARE FOR FUTURE

THE GOOD TIMES ARE DEFINITELY ROLLING.

Barring some major catastrophe, 1999 will be the best year in the entire century-plus history of the automobile industry.

In the month of August alone, Ford Motor Co.'s sales were up 8% over the previous August. DaimlerChrysler's Chrysler sales were up 9%; Mercedes-Benz up 11.8%. Volkswagen reported its August sales were up 34%; Audi's went up 59%.

The rosy reports continued to flow in August. Honda sales were up 10.5%. BMW was up 32%. Saab was up 25%. Infiniti was up 6%. Toyota increased 2.8%. Hyundai was up 81%. Kia gained 64%. Subaru sales were up 9%. Land Rover was up 47%.

GM's sales were up 64% in August over the strike-impaired August of 1998. You get the idea.

The industry will destroy 1986's all-time record of 16.1 million units by at least 1 million vehicles.

GM's economist says the industry will hit 17 million this year. Ford Div. President Jim O'Connor says it'll be more like 17.1 million. Mr. O'Connor adds that the market will dip to 16 million next year.

Some sources, however, are reporting record demand for vehicles with the year 2000 designation, which could boost sales past that and keep the records crumbling.

"The industry continues to run at a spectacular rate...," John Middlebrook, GM vice president and general manager of vehicle brand marketing, is reported as saying.

All this is good news for manufacturers and dealers alike. Take a moment to enjoy the prosperity, then stop and put it all into perspective. Remember what Isaac Newton taught us those many years ago. Whatever goes up must come down.

I don't have a crystal ball, so I can't begin to tell you precisely when the market will slow down, but be sure it will - someday. This is, after all, one of the most cyclical of businesses.

I recommend that all dealers use these prosperous times to prepare for the inevitable market dip. Use some of the extra cash being generated by your business to conduct some employee efficiency studies. Take a close look at your sales and service processes. Are they as efficient as they could be? What can be done to really make customers happy?

Are your body shop, service and parts departments being marketed to consumers outside of your customer base? Are your prices competitive with the independent shops in your area?

Do you have an Internet presence? Is it doing anything for you? How effective are your TV, radio and print advertising campaigns?

This is the time - when the going is good - to make sure every aspect of your dealership is running at peak efficiency.

If you wait until downturn comes, it'll be too late. If you adjust then, it'll be a knee-jerk reaction and it won't be done in a systematic or analytical manner. In other words, it'll be sloppy.

But if you closely examine every aspect of your dealership now, you'll likely reap the benefits of a more efficient operation while business is good, and make even more money.

Oldsmobile On Rise

Even Oldsmobile, GM's oldest and at one point most-stagnant division, is seeing an increase in sales in 1999. Olds sales are up 22% this year.

Most of the credit for Oldsmobile's turnaround has to go to its introduction of decidedly non-traditional Oldsmobile products: Aurora, Intrigue, Alero, Bravada.

But now that the division has more-stylish vehicles, it can go after different kinds of buyers - young people, minorities and women.

Even the division's marketing general manager, Karen Francis, is non-traditional. She's a young, attractive woman who came to GM after focusing on marketing non-automotive consumer goods.

Expect Oldsmobile's resurrection from the near-dead to continue.

Cadillac Tweaks Crest

Cadillac is using these prosperous times to prepare for its future. Its crest and wreath, which have been a symbol of automotive excellence for more than three decades, has undergone a facelift.

Starting with 2000 models, the crest will shed its coronet. Its wreath will be more streamlined and stylized and the arms itself will be shorter, wider and be sans birds. Some have described it as bold and crisp.

I'm a traditionalist. I like the old crest, but I can understand the need to make Cadillac's symbol more suitable for the division's new high-tech product offerings.

Tim Keenan is senior editor of Ward's Dealer Business. He can be reached at [email protected]