Sales down for 6th month... WHY?

[TomLaPointe]

the pieces do NOT seem to be lined up to repeat 08. no massive housing bubble loans, not as many car loans that cover 10K in neg equity, nor loans as deep into subprime territory.

but certainly a boatload of used car inventory that continues to squeeze new cars for more incentives will be pushing down UC values for trade allowance

 

[Steve Stauning]

Everyone has a car. The years of growth were largely fueled by easy credit and unfilled needs/wants.

Credit has tightened a bit and fewer people have the "need" for a new car. (Of course, 16+ million can be a very nice market for those who don't panic.)

 

[Alex Snyder]

Of course, 16+ million can be a very nice market for those who don't panic.

For sure!

 

[Jeff Kershner]

I'm not witnessing a drop in traffic or leads - online or showroom. But, Yes - sales have been in a slump. Time to build more confidence in the purchase decision. The last 2 years has caused many to become "lazy".

 

[jscole86]

but certainly a boatload of used car inventory that continues to squeeze new cars for more incentives will be pushing down UC values for trade allowance

But, it's a great opportunity to sell more used! Create the market, don't ride it.

 

[TomLaPointe]

But, it's a great opportunity to sell more used! Create the market, don't ride it.

Dealers have to be REALLY, REALLY good at choosing and managing UC inventory. . . way beyond the INVENTORY FOR DUMMIES apps and software that seem to have turned some managers into zombies when it comes to selection and pricing

 

[Tallcool1]

Dealers have to be REALLY, REALLY good at choosing and managing UC inventory. . . way beyond the INVENTORY FOR DUMMIES apps and software that seem to have turned some managers into zombies when it comes to selection and pricing

I agree with what you are saying here. I am an Independent, so I don't have an option in terms of New or Used.

We loaded up on Inventory according to what the annual trend had been over the previous 36 months. Bad decision (in hindsight). We ended up with about 10% of our inventory sticking due to the non existence of a "tax season". We bought what usually sells in the spring, and it didn't work. We have worked out of most of it, but it hasn't been easy.

So @TomLaPointe , you have recognized the need for excelling at managing UC Inventory beyond software packages. Can you expound on this? I agree with you, and know what we have done to focus on this. I am interested on any additional advice you can give.

Thanks

 

[Russell James]

I think the business is ripe for the picking and with all the tools that are available my crew needs to be experts and never stop evolving with the times there is no doom in this camp

 

[Jason@nabthat]

I'm not witnessing a drop in traffic or leads - online or showroom. But, Yes - sales have been in a slump. Time to build more confidence in the purchase decision. The last 2 years has caused many to become "lazy".

@Jeff Kershner I agree with you 100%. July was a down month as far as sales for some OEM's/Dealers, but June was tremendous for most - Maybe just a dip or maybe consumers spent $$$ on holidays this July. The fact is that this year was suppose to see a huge drop in sales (so was last year), however, we are still pacing close to 17 million cars!

We seem to overreact to "bad" news and take "good" news as being the standard.

By the way. some of our dealers pulled in 500+ leads from their website in July and we had one of our Hyundai dealers sell 220 new vehicles (20% increase YoY). We also had a dealer sell 75 new vehicles July 4th weekend and another 104.

Lets not forget the increase in minimum wage that starts to hit people's pocket this month in some states.

 

[craigh]

The cycle tends to cycle.
Theoretically, this is what we're fighting right now.

View attachment 3274

With all the bad news today, just wanted to say that this guy nailed his prediction if things continue this way.