The past two years have been the roughest time in the history of the automotive business. The number of car dealerships in the United States has been declining for decades.
Roughly 200 dealers close their doors every year. Last year, however, 2,000 dealerships went belly up – that is a 10-fold increase in closures. Ouch!
Some dealerships closed due to economic conditions, others experienced an OEM-instigated forced march “off the gang plank.” In some cities, this “thinning of the herd” was a necessary market correction. In other instances, the closures made absolutely no sense at all. Despite the beating our industry has taken, there is so much for which to be thankful:
Your dealership is still in business. You made the cut; you survived. People are still buying cars and buying service from your dealership every day. Don’t ever take for granted that the doors are still open and the lights are still on.
You still have a job. The pay checks are still coming, and since most pay plans are performance-based, there is no limit to your earning potential. Note: If you are one of the 10,000 people who lost a dealership job, first I want to commend you for continuing to read Dealer magazine. Second, please know that many dealerships are looking for advisors who can sell maintenance services. If you can sell service then there is a job for you. (Order takers need not apply).
The worst is over. Business is on the upswing. The mid-term elections have ushered in a new sense of optimism. Traffic counts on the service drive are increasing, hours per RO are increasing, and gross profits are increasing. Be thankful that you weathered the storm and blue skies are ahead.
The average vehicle age is increasing. Older cars have higher mileage and therefore present more maintenance opportunities for your service department. What a blessing it is to offer preventive maintenance to your customers. The more maintenance you sell them, the more money you save them…and that is a blessing for your customer.
There is over $50 billion available to those who ask. The Motor Equipment Manufacturers Association said the automotive industry missed out on $53 billion last year. That is money that was “left on the table,” because vehicle owners weren’t educated and service departments didn’t ask for the business. Thankfully, you have an opportunity to get your share of that money in 2011. Boy, you talk about the mother of all stimulus package — and it is right under your nose, on the service drive.
People are buying preventive maintenance. My company has dealership clients all over the nation that have seen a huge surge in their customer-pay business. Thank God that your service department has a lifetime annuity stream called preventive maintenance. It is not credit reliant, it doesn’t depend on economic condition, and every car needs it. How cool is that!
The best days of the automotive business are ahead of you — if you are in the preventive maintenance service business.
Take a few minutes to analyze your business and count your blessings. Sit down with your managers, techs, and advisors to review the year. Keep the meeting positive, celebrate your victories, reward your top achievers, and congratulate your team for a job well done.
On a personal level, you are probably like me in that your blessings far outweigh your hurts. I’ve got a great wife of over 25 years, we attend a great church where we have many dear friends, and I’ve got two beautiful daughters in college. I’ve worked for BG Products almost 30 years in an industry I absolutely love. I work alongside the greatest team of professionals that the automotive business has to offer, both clients and co-workers. Life is good!
On behalf of my wife, Angela, and my girls, Beth and Hannah, I want to wish you a Merry Christmas and a Blessed New Year!