Fall 2009 issue of Horizons

INDUSTRY u AUTOMOTIVE

changes have presented many opportunities for dealers to capture market share and gain competitive advantages. Dealerships that are able to seize these opportunities in the short term are the dealerships that will be successful in the long term. The whole industry is dramatically different than it was just 12 to 18 months ago. Who could have predicted the collapse in the financial services industry that would ripple through the entire economy, causing vehicle sales to plummet and resulting in the bankruptcy of Chrysler and General Motors? While vehicle sales have been recovering, the changes touched off by these events are by no means done. Vehicle sales will not return to the levels of recent years for some time. Until then, dealerships will have to make the most of what they have. The immediate and obvious lesson of all this turmoil is that businesses, in general, will need much more equity to operate, and financing will be more costly. But in the longer term, success will depend on the ability of dealerships to move quickly to take advantage of changes in the marketplace. The cash for clunkers program is an example of an opportunity to seize market share. The pace with which this program was designed and implemented is unprecedented. An entirely new set of internal processes and procedures had to be designed from scratch and implemented to comply with the requirements of the program and get reimbursed from the government. To make matters worse, dealerships had to balance the competing demands of satisfying customer demand and getting paid by the government as the funds allotted to the program quickly dried up. The response from dealers has been impressive. They have shown to be remarkably adept at moving quickly to create marketing programs to get customers in the door to take advantage of the program. Another good example of adapting to change has been in fixed operations. The difference between the dealers who make it through the recession and

Dealerships Seize Opportunities for Long-Term Success There are few sectors of our economy that have been as dramatically impacted by the recession as the automotive industry. Not only have the changes been enormous in their scope and size, but they have happened at an unbelievable pace. It is not an overstatement to say that the fortunes of the industry have been changing daily. By John Butler, CPA

As turbulent as these times have been for the automotive industry, underneath the turmoil these

25 u fall 2009 issue