Dealers More Optimistic Than Their Customers

Dealers are feeling better about their prospects than their customers are feeling about theirs.

Greg Goebel, president of Greg Goebel Training and Consulting, said confidence remains high among the dealers he consults with.

"I haven't talked to many that are concerned over the economy taking down the industry like it did in 2008," Goebel said. "Most all the dealers that I have talked with are having great years and had great years in 2010."

The strong dealers continue to perform well, but not all dealers are that well off.
Ron Brown, president of Larry's Auto Sales in Fresno, Calif., speaks with many who are having a hard time. His store has been in business since the last major downturn 30 years ago and they'll weather this one.

"We're fine, we own everything," Brown said. "We're not struggling, but other people are struggling."

State and local governments are some of the biggest employers in California, as they are everywhere. In Brown's state, though, they've been struggling especially hard.

Vallejo, a city north of San Francisco, recently went bankrupt and Brown expects more to follow.

He finds the store taking smaller down payments. But even though people have less money, they have greater expectations.

"For $1,000, they want a $3,000 car," Brown said.

Other dealers are more confused than concerned, said Brent Carmichael, a consultant with NCM Associates Inc.

"The dealers I work with are scratching their heads," Carmichael said.

Some of the dealers in his Twenty Groups had their best summer ever while others had their worst. No pattern proved obvious, such as geography or local employers.

Carmichael expects the usual August slowdown to hit all dealers as they compete with back to school sales and state fairs for their customers' dollars.
He said all dealers can do in that situation is work on turning the ups that come to the store into sales.

Jerry McDonald, owner of Big Tex Auto Mart in Dallas, said he's having hardly any potential sales walk in the door these days.

"Walk-up traffic is nearly at a standstill," McDonald said.

He's doing fine thanks to repeat and referral business at his buy-here, pay-here store.

McDonald also sells classic cars and that market is hurt more by consumer confidence. He said consumers are putting their money into gold or paying off debt rather than purchasing the dream car of their teen years.

View the original article here

Turn your Auto Notes into cash