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Comment by JIm Fisher on August 29, 2016 at 4:35pm

 I just went to a Ford meeting where they predict that the SAR will be the same as last year, thus a flat line growth.  They proceeded to show that market share has remained approximately the same by most of the manufacturers.

That means that in order to increase market share, it will have to be taken from other manufacturers who in turn are doing the same.

Recession is a strong word and it is usually caused by a massive increase in interest rates, which does not look to be threatening or a down turn in housing, which in many cases is starting to rebound due to demand or a downturn in auto sales which is the majority of things we make in the US and do not import.  

It still comes down to taking care of the customer and retaining that customer and that is the number one course of action when things slow down.  The other thing is to keep your fixed expenses as low as possible and make sure that you have a productive staff that gets paid on what they generate.  Too many people are allowed to exist in this business, because others take up the slack in their production and their main purpose is to cover the floor.

Cutting expenses only reduces losses.  Controlling expenses and generating gross is the only way to make a profit.

If you have not made a profit in the last 4 years, there is no hope for you.  If you have made a profit and kept your fixed expenses to a minimum, you should be able to profit, even in a down market.

It is the glass half full or half empty thoughts that create the problem.  If it is half empty, work on filling it up.  If it is half full, keep pushing until it is more than one half full.  Basically, it doesn't matter.  Just keep setting the bar higher and reaching to attain it.

If you have concentrated on the people who have money and have worked to get down payments, you should do fine if their is a downturn.

Comment by David Ruggles on August 26, 2016 at 6:54pm

Well, there's always a "coming recession."  What is also true is that many dealers these days think they are better operators than they are.  Record sales coupled with fewer dealerships and historically low interest rates certainly won't last.  These are the days when dealers can chase each shiny new object with the hope that the newest and greatest thing will be some kind of salvation.  When times turn hard its time to get back to the basics. 

Today's volumes mean dealers can still make a profit without grasping for every possible dollar in a deal.  Gross profit is freely given away upfront for fear of offending consumers.  Artful strategies of negotiation have been supplanted, at least for the time being, because low sales person compensation means real talent goes where they can make real money.  I've never seen the environment for sales people any worse than it is now.  The turnover keeps increasing, meaning consumers are meeting their sales person for the first time.  One stat that's never changed is that the closing rate triples when consumers already know their sales person when they set out to purchase.  Many dealers operate cannon fodder sales staffs and wonder at their low closing ratios.  I guess the expect managers to be able to swoop in and save the day at some point.  Like I said, sub standard practices. 

The 800 pound gorilla in the room is sales person compensation and how our industry treats its sales people as disposable commodities.  So many are looking for that easy fix when the obvious one is right before their eyes.