Why is My Dealership Experiencing such a Slow 2008?

Question

It's crazy. The housing market is terrible. The banks we work with are dropping deals like hot cakes now. Our budget has exceeded and we are at a 70 percent decrease in sales. I work as an internet manager for a used car dealership in Los Angeles, CA.

I've used all social networking, specials, ebaying, and every inventory outlet we have here, radio, tv, etc.. and we still are experiencing slow sales.

It can't be our selection, it can't be our sales process. Why does the economy bring about such a recession in the auto industry? What causes this?

Answer 1

Sorry about your drop in sales and income, i for sure can understand that, as i was a dodge salesman through the good times and a little bit when they slid.  Now, thank god, BMW is very strong in the northeast, and we posted a very good july, august is shaping up ok as well.  We did have a tough spring, sales flat but grosses down.  

The "recession" isn't bad everywhere, it's really tough in cali and florida, especially for highline.  If you are in chevy, ford, or god forbid dodge/chrysler/jeep, get out now, and go foreign.  You can still make money at honda and toyota, you'll work your *** off though for pennies, but you'll be bringing in some money.

I know first hand how tough it can be.  One year you are over 80k, next down to 60k, then to 80k, back down to 60k, and unfortunately the 6 figures are looking harder to reach.  Keep up a positive attitude, believe it or not, the "car gods" are looking after us.  At least, that's what keeps me going.

Answer 2

People losing jobs, money getting scarce, high gas prices. People are afraid to spend money in the fear that they might lose their job's next.  

Answer 3

I know two dealers here that had incredibly stagnant months. July brought in zero new car sales and four used car sales for one of those dealers. Rough doesn't even begin to cover the hurt.

People are not so willing to part with their pennies with the economy doing so poorly. Even the wealthy are watching their spending closer. I read that some private jet companies are scaling back crews and cutting their fleets. It's hurting every echelon, to varying degrees.

There's a trickle up and trickle down effect. It started with trickle up, in this case. Gas prices rose, people started reacting, markets got tense, housing prices dropped, the rich who lived close to their means started living beyond their means, and then the spending effect kicked in. The rich account for something like 25-70% of all profits in different markets. When the rich stop spending, everything suffers. Fewer customers means less of a demand for employees which translates to cutbacks, in the extreme cases.

I should mention that I hate the word rich. What I mean is those who SPEND. People who spend larger but don't earn the highest salaries are still lumped into the "rich" category because of their stimulus on the economy. Too bad that's what's hurting us now. They live beyond their means and turn their SUVs into vehicles (no pun intended) that damage the economy.

Answer 4

Who's going to go out looking for a new car when they're at home trying how to make their mortgage payment and pay for groceries that are sky rocketing?

Many of your potential customers drive SUV's that they would love to trade in (I know because I'm one of them) but dealers won't give us squat for them because they can't be resold. And we can't get what we owe for them selling them ourselves.

Gas prices go up and the housing market struggles and bam! we have a big problem that's going to affect every industry.