Respect history – or watch hell break loose

Florida dealer Jason Kuhn expresses a fear shared by many other retailers these days: What if the manufacturers fall back into their bad old habits of cranking up production and pushing unwanted inventory into the retail channel?

“Once a manufacturer crosses that line, all hell breaks loose,” says Kuhn, who owns three Volkswagen stores and one Honda dealership in Tampa, Fla. “Once you go to an oversupply situation, all of a sudden now you're running around like a chicken with its head cut off trying to find different buyers for your product.”

Despite the production discipline shown in the past year, it could happen, says Kuhn. People in the car business have short memories. They repeat their own mistakes or the mistakes of competitors -- even after denouncing such practices.

He points to GM and Ford, which for decades worried mostly about each other, not the rising power of the Japanese automakers. In recent years, Kuhn says, he has seen the same dynamic playing out with Toyota and Honda as the Korean automakers pick up speed.

So be careful, Kuhn says -- and read the history books: “Nobody has been able to defy gravity in this business.”