Some may disagree with the title of this article, but it is all in how you look at it. In just the first 60 days of 2009 we have seen our IRA’s and SEP’s all but disappear, credit markets dry up entirely, unemployment on the rise and almost a nationwide fear of what the future will bring.
On top of all that, the automotive industry is experiencing a shake up of which no one could have predicted even as the close of 2008 was nearing. Since then, the Big Three have asked for and received (and asked for again) several billions of dollars in loans and now the debate is “Should we keep bailing them out?” The factories are still shut down and the show rooms have seen as much as a 50% drop in sales.
This has all trickled down to you snd other car dealers. Auctions are either closing lanes or entire locations all around the nation. Trader Magazine has closed their doors and AutoExtra.com is turned off as of March 1. We all know of at least one dealer who has been forced to shut their doors in the last 60 days and there is still more shake out to come. I for one say, “BRING IT ON!”
This issue of The Internet Corner may get to fewer members due to business failures, but the remaining crowd is still here because they are a success! This means for a vendor like me, while the audience is smaller, it is more attentive. Like the housing industry, I believe the availability of easy money allowed some to become or remain as car dealers who should have been seeking another career. Once the dust settles there will be the same amount of car buyers out there and a few less car dealers to compete with. Another way to put it is we will all be eating from the same size pie, but there will be less eaters at the table.
My father-in-law, Bill Allen of www.AllensAuto.com and I were talking recently and he said, “To make it in today’s market a dealer needs to be doing what got them here. If you were in business ten years ago you should be doing the same thing now you were then.” In part, I agree with him. Ten years ago, it was less common for an independent operator to have tens or even hundreds of thousands of dollars in floorplanning. Ten years ago dealers built reputations with auctions, franchise dealers and wholesalers because these reputations also produced a steady stream of cars. Ten years ago unless you were a BHPH dealer you were constantly looking for new credit sources for your clients. Ten years ago a dealer might have only had a sales person and a lot porter and maybe a buyer.
Bill will tell you I was put on this Earth to argue with him. My initial response was a lot has changed about your industry in the last decade. Case in point, advertising. Back then the Classifieds section of the Washington Post was as thick as any other section of the paper on a Sunday morning. This last Sunday the Classified section was four pages. That included cars, houses miscellaneous and job postings! Except for a few die-hard franchise dealers no one is advertising like they did ten years ago. Ten years a dealer would have black and white photos of their cars with 3 line descriptions put in Trader magazines. Already this year we have seen this type of advertising go away completely from coast to coast.
So, I would agree with Bill, up to a point. We have all heard, “the only thing constant is change”. For many of those who have failed by now, the change was too much to overcome. For others, change is the same old thing. The secret to success in today’s market is in how well you identify and then react to change. Knowing what your industry is doing and going through is important. Reacting to it instead of succumbing to it then becomes possible.
Take the lack of print advertising now available to dealers, for example. Late in January I visited dealers in the Valley area of Virginia. This area has been doubly hit with the loss of the trade magazines and a couple regional online advertisers. The first dealership I stopped at was devastated. He had been advertising in these magazines for years and other than his website had not really tried anything else. He just knew the loss of this advertiser was going to hurt his bottom line. He had already succumbed before the last issue was even printed. The next dealer I visited brought up the loss of advertisement and I started to get my hanky out to wipe the tears but this dealer took a different turn. She said she had been wanting to ramp up her Internet advertising and now that this one door had closed on her, she was now ready to walk through another and get started with a new approach. She reacted before the last issue was printed!
The business owner operating on “scared money” has or will soon dry up and will soon go away. Do not get scared. Realize you were a success before this most recent economic downturn came about and you will be a success when the next recovery comes. Your industry will be a better place because of it in the end.
In conclusion, I think I must go back on what I said earlier and say I agree with you, Bill. To be a successful dealer today or ten years ago, you had to buy cars and sell them. You may have advertised in one or more ways in order to increase sales. You may have arranged financing or provide warranties and almost always had to fix them. The only things to change are the methods used to accomplish each of these tasks.
VIADA and JTZ Enterprise can help you with a new and improved way of advertising through www.VAUsedCarDealers.com. For only $35 a month your vehicles will be exposed to tens of thousands of car buyers AND will get displayed on many other websites. Some of these sites are free to you. If you pay to advertise with sites like Cars.com and others, this member benefit would also include sending your listings to them. You will also gain access to the Craigslist listing tool, wholesale prices from other VIADA members and more all for about a dollar a day. Call today and let us get you started with a plan for success in 2009!