The Auto Market Change

As I'm sure most of you have heard, the Automotive Industry is taking a big hit by the current economy and dealerships are making drastic changes. Most people don't really understand it or know what is going on behind doors because they don't work at a dealer or auto shop. Currently I am employed at a GM dealership and before that I was working for a Ford dealership. Both are American auto companies that have been hit extremely hard by the current economy. You watch the news and you see Chrysler file for bankruptcy, GM soon to follow, and dealerships closing throughout the country. Although this is alarming people need to realize that this doesn't mean that the product dealers are selling are no longer good or worthless. You aren't going to go to your local dealer and the windows are going to be boarded up and it be a ghost town. All dealers will still sell parts, cars, and service, they may be in the process of closing but usually this process will take months to do and sometimes a year. Currently we were told that our dealer won't be closing. Even if we did get the bad news, our contracts aren't up until 2010 so we wouldn't be closing until then anyways. 

We dealers are trying to survive and it is frusterating that consumers are losing confidence in our products because they are scared. When I started working for the Ford Dealer about 5 years ago, times were great. People were still driving big vehicles, not worrying about gas as much, doing their repairs, buying parts, buy cars and everyone was doing well. We started to see a decline in business when gas prices sky rocketed. Being that the American companies are the main producers of trucks we were hit hardest there. To dealers, this was turning point down the hill we are currently facing. As gas prices went higher and higher business fell and fell. The odd thing was though when gas prices dropped again, people still did not want bigger vehicles and want smaller or at least better fuel efficient vehicles. Since then sales have dropped and dropped. 

As business dropped dealers had to adapt. I noticed that we had to lower prices on parts more often to make a sale, sales people were making deals or offering low financing, often times service would maybe offer and extra perk for bringing your vehicle in. We basically had to work a little harder to make a buck which i dont think is really a bad thing. I noticed that when we were making a lot of money, people were getting lazy and not really putting forth the best effort because they were getting a good check regardless of what they did. So with that regard, it is nice to see employees being more personal, helping people out, and really starting to be the local neighborhood dealers that the good ol days had. Then the whole housing market went to crap, people lost their jobs, and dealers really fell into a slump. 

This brings us to the current state of dealers which is a hard spot. With more and more people losing their jobs we see less and less people coming into our dealers. This is really hard on dealers and most dealers had to lay off many people as they try to hold on to their business. I noticed that when the bailouts started to come out of GM and Chrysler that people got really scared, they thought the world was ending, and really a lot of us felt hopeless. I notice that workers really just didn't care anymore and would be negative about customers because they always wanted discounts or free stuff as we are all sitting here trying to make a buck. So now we are sort of at a cross roads with dealers closing and companies making changes. 

The hard thing all about this is that the dealers are the ones in the thick of it as the corporate branches sit back and tell us what we need to do when we have no contact with them. We really don't get much contact from the big guys and are just standing by trying to make some money and hold on to our jobs. On all of the vehicles that sit on our lot, we have to pay flooring which is basically we are renting their cars until we sell them. Some of these cost are 300 dollars up to I have heard 600 dollars. That means we pay for at least 50 new cars a month which we can average around 25,000 dollars a month just on vehicles that sit there. Some dealers pay more depending on how many cars there are on the lot. Dealers would have a better chance if we didn't have to pay flooring on vehicles we can't even sell. Another bad thing is that the companies won't take the vehicles back and won't produce a vehicle people want. GM has been working on the Chevy Volt for who knows how long now which is expected to help sales if they can get it out on time. They have hybrid Tahoes and large vehicles but who wants to pay $50,000 dollars or more on a vehicle that you may get another 5 MPG. Also there are constant cost that the companies put on their dealers for different things. They charge us shipping fees or restocking fees on parts all the time that cut into our profits even though we are selling the parts for them. To help us out the companies could reduce or stop all these pointless fees and their profits would go up because we would be more willing to sell their products. 

So where do we go from here, that's something everyone in the auto industry thinks. Everyday we wonder if its our last day, wondering who is next. I guess all we can do i sit back and just see what happens. I think we can get through it but its not easy. There is no way we can lose our US companies.Hopefully everyone will want to keep us around and continue to spend their money with us. We don't mind making a deal as long as we can keep you coming back. 

We will go nowhere without our customers so here are some tips if you want to help us out. 

• Buy factory parts and service if you can. i know everyone thinks dealers are more expensive which sometimes they are but it doesn't hurt to look at both options. Often times if you ask for help we will because we need the business. We often times are more expensive because we offer more than aftermarket in terms of warranty and security. 
• Talk to your dealers. Often times people don't like dealers because they have bad reps. Some dealers are bad, not all. If you don't like something, voice your concern. Often times we would rather know what is bad, rather than lose a customer. 
• Get comfortable. The more and more you go back to the same dealer, the better service you get. I have one customer that only buys parts from me because I give him a discount. The only reason I give him a constant discount is because he only buys from us. 
• Make a deal. If you are buying parts and its over I would say 50 dollars, don't be afraid to ask for a little discount. Often times we will be willing to drop 5 or 10 bucks if you need it. If you go into service ask for a car wash or maybe a free tire rotation if you are getting other stuff done. Doing this helps you out and also gives us an opportunity to sell more things. 
• Refer a friend. Often times when I get customers that say they are from someone else, I will be more willing to help out and give discounts because of the good will. Also, ask a sales person about getting a spif if you send someone in to buy a car. 
• Be Patient. With dealers having to lay people off we often times have less people to help out customers. If something is taking longer than you think it should ask if you can come back later or be willing to wait. If you take a look you will probably notice that there may only be one person around to help you.