Dealers need to embrace for supply and demand profits!

Short term thinking or long term planning?

With the unfortunate recent catastrophe in Japan, there is without question going to be a ripple effect of supply and demand. This is a time to evaluate the way you do business, and jump into value selling of supply and demand.

Our industry is one of the last free enterprise opportunities in our country. The media is already hyping the lack of supply and demand, I highly suggest to jump on the negative news band wagon and build value with supply and demand. The fact of the matter is that there is going to be a supply and demand issue if you're not feeling it as of current.

It's amazing the gross a sales team can hold when the state of mind is value selling, and much easier to do when supply and demand is a real issue. Prepare now because gross might be the only opportunity to rise above such a catastrophie. Gross is king anyway, always has been and always will be!~

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Great point Bobby! It certainly wouldn't make sense to hold prices down while you run out of product; however, one needs to be careful. The upward shift in the point of equilibrium will not be the same for all models. Supply shortages are different at the model level, as are demand and the willingness to shift to an alternative product. Dealers need to approach the pricing issue surgically across their product mix, rather than an across-the-board policy shift.

The number of used vehicles coming off lease will impact the opportunity as well. If both new vehicles and certifiable used vehicles are in short supply, then the opportunity is even greater. In those instances, in may make sense to put more reconditioning into vehicles two and three years old in order to make them new-vehicle alternatives.

Thank you Dennis, you make some good points. I've always said, most will sell from the bottom up while few will hold from the top down. In my experience, holding gross is a culture issue. Some truly know how to hold it while others struggle to find the special ingredient. 

 

Selling is a state of mind. If one creates enough value the perception of financial loss goes out the window!~

 

Great share my friend....  

Well said Bobby,Take advantage of opportunities when they arise,be aware of your environment then capitalize on it...
Perfectly put Rick!~

Rick Williams said:
Well said Bobby,Take advantage of opportunities when they arise,be aware of your environment then capitalize on it...
The problem isn't limited to sales issues; Fixed Ops will soon be feeling the pinch as well. Parts departments need to be bulking up on Japan sourced parts to keep operations going until the vendors find alternate supply. We will soon see vehicles down for extended periods of time and dealers need to be prepared to either offer replacement alternatives or even move the customer into a different vehicle.

You nailed it Jim!~ 

 

This is definitely a fixed ops issue as well... 

 

Jim Richter said:

The problem isn't limited to sales issues; Fixed Ops will soon be feeling the pinch as well. Parts departments need to be bulking up on Japan sourced parts to keep operations going until the vendors find alternate supply. We will soon see vehicles down for extended periods of time and dealers need to be prepared to either offer replacement alternatives or even move the customer into a different vehicle.

Hi Bobby. Gross?

Here's a couple of data about the Italian dealers budgets! 

Gosh... what you think about a comparison between private dealers and carmakers owned ones?

http://www.automotivespace.it/eng/auto/build-and-sell-cars-is-still...

Please let me know your thoughts. Ciao.

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