Are we really in an Auto Credit Crisis?

[Jennifer Schrader (blog)]

Thanks Nick!

 

[Brian in Etown]

Jon, Can I send my 500's your way?

 

[Jennifer Schrader (blog)]

Thanks Nick!

 

[Jake]

Everyone will always have their own opinions on the state of the industry...causes of problems, whether problems even exist, etc. I agree that consumer panic is a large part of the problem, if not the biggest part. I still believe there are a lot more signs than that though which point to validity in the crisis claim. Not sure if it's going to be anything long term or not, but I just heard from an inside source that Autotrader.com laid off 100+ outside reps yesterday. I know a lot of people are going to speculate on other (internal) reasons for the layoffs, especially given the small number, but I think the fact that a large auto industry company like Autotrader who has never had layoffs just laid off part of its B2B driving force speaks volumes.

 

[Thom]

I just recently heard of the autotrader layoff, from what I've heard it was mostly Sales Service Reps (SSR's) throughout the country as well as some reductions in inside sales positions throughout the country also. I spoke w/my Rep last week who expressed his concern in possibly seeing alot of dealer cancellations between now and the end of the year as many dealerships are reducing ad spends across the board.

 

[Amanda Marsal]

Not only are the consumers afraid to spend the money, so are the banks. Last week all of the Used car managers in the area that sell GM products had a meeting to announce that GMAC can't get the capital to make their loans. What does this mean for us? A customer must have a 700 to even be considered, and even then they are only financing Black Book values... Are they trying to sell less than they already are? Speak of the devil, I just told my new AutoTrader rep that I couldn't justify $8k a month just to break even...we are probably going to cancel...

 

[Jennifer Schrader (blog)]

I was in the middle of an instore meeting when the owner got that emailed to him regarding the GMAC 700 Beacon store deal last week Tuesday. All of us had the "Deer in the headlights look". But we did all have a great discussion regarding that. Justifying the spending in the dealership from newspaper ( the low ROI advertising ) I am not saying that spending money in the newspaper is bad but as mentioned the ROI is low and the cost is HUGE! Allocating those cost to any dealership online presence will surely pay off. There still are shoppers out there, you may be asking where in the world are they? They are not coming into the dealership! Things have changed the way the consumer is spending their money: The Smart way and its online!

 

[Jody DeVere]

Buyer Confidence and Fear is the problem.

Great article today in the New York Times featuring Valencia Acura an AskPatty.com customer on this topic.

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www.nytimes.com

Excerpt:

At Valencia Acura in Valencia, Calif., Cheri Fleming, the owner, has witnessed something she has never seen before because of that fear. Customers come in, negotiate a price and even get so far as to allow the dealer to help procure a loan, and then “a lot of times, they just get up and leave.”

“Consumer confidence is crushed,” Ms. Fleming said.

Jody DeVere
CEO/President - Ask Patty, Inc.
www.askpatty.com
www.carblabber.com