Tuesday, November 12, 2019

Finding Success When the Automotive Market Is Down

Hand holding up lightbulb in front of chalkboard reading 'New Mindset, New Results'
Since the Great Recession, the automotive industry has been on the upswing, but the tides are turning. In 2019, unsold vehicles hit a 10-year high, with automakers and dealers holding on to a 78-day supply. This comes amidst other industry challenges: job cuts, a shortage of skilled technicians, the prospect of self-driving vehicles upsetting vehicle ownership, rising interest rates, and more.

In response to this market shift, dealers are feeling pessimistic about what the future holds for the industry. If you’re in that camp, it’s not hard to see why you feel this way. For a successful 2020 — regardless of what the market does — start with the strategies below.

Look for Untapped Opportunities to Save Money


When you’re strapped for cash, even seemingly small costs can mount quickly. Take the time to evaluate what unnecessary costs or inefficiencies are cutting into your profits. One dealership made the decision to simply offer customers paper cups they could fill at the water fountain rather than providing bottled water, saving $6,000 per year.

If there are tools available to help you address inefficiencies, weigh the investment against the money it’ll save you in the long run. For example, having a documented key control process and using an electronic method for tracking keys can help cut down on the cost of replacing lost or stolen key fobs or even vehicles.

In some cases, you might not need to make any changes to your operations to create more room in your budget. Dealer reimbursements are a great way to recoup money for something you’re already doing. Let’s say your service department offers transportation to customers bringing their vehicles in for warranty work. Some manufacturers, such as GM, will reimburse a few dollars each way for shuttle rides. If your manufacturer reimbursed $5 per ride, that’d be $500 for 100 shuttle rides a month, or $6,000 a year.

Whatever changes you make to help your bottom line, be sure they won’t be detrimental to the customer experience.

Address Threats to Your Revenue and Reputation


Don’t let thieves help themselves to your hard-earned profits or hurt your good name. Protect your business from common types of theft. Some examples include the following:

  • The Craigslist scam, which involves a thief posting a vehicle for sale in an online marketplace and then stealing it from a dealership’s lot once the crook finds a buyer for the vehicle.
  • The key-swap scam, where someone swaps a vehicle’s original key fob for a dummy fob, returning later to steal the vehicle.
  • Organized theft rings, which often target dealerships that keep keys in vehicle-mounted lockboxes or other easily accessible places.

Even if you’re never the target of theft, the benefits of investing in prevention measures such as employee training and secure key control far outweigh the consequences of dealing with the aftermath of stolen keys or inventory.

Stay Positive


You can’t control the market, but you have a say in how you respond to it. In fact, it’s imperative that you stay upbeat in less than ideal conditions. Being positive has a neurological impact, which in turn can increase job performance and employee morale.

In a Stanford University study of how being positive affects children, the lead researcher commented that positivity is as important as IQ to academic success. The group of children who participated in the study were better able to answer math problems, retain memories, and solve problems when they practiced being positive.

Only 25 percent of job success is related to IQ, and optimistic employees have clear advantages over cynical ones:

  • They recognize potential even in a less than ideal environment.
  • They’re motivated to work harder to overcome obstacles.
  • Their creativity flourishes, helping them come up with creative ways to reach their goals.
  • They inspire coworkers to be more successful at their jobs.

To encourage a positive culture, start by increasing employee satisfaction by making sure employees have access to the tools they need to do their jobs successfully, celebrating successes, and leading by example.

What changes will you make to increase your dealership’s success?