Dealers who went looking in Las Vegas to see how bad off the car business is got a shock last week. For an industry besieged by lousy news, things aren't that bad.
The retail industry's annual gathering at last week's 2001 National Automobile Dealers Association convention could have been a downer. The past weeks have seen job slashing and factory cuts at the Chrysler group, the demise of Oldsmobile and spotty relations between Ford and its dealers. Market forecasters ratcheted down their expectations for the sales year, and big parts manufacturers are laying off workers by the thousands.
But under the blue skies of Las Vegas last week, all those troubles seemed to belong to somebody else.
"We just had a great month," reported a slightly amused Thomas Elliott, executive vice president of American Honda Motor Co., as he hurried to attend the Acura make meeting. "You've got to wonder if all this bad news isn't just the media's problem."
Any gloom that did surface at the convention came from the Big 3. Their sales all slipped in January, while many import brands posted increases.
For example, Porsche dealers at their evening reception toasted the factory for a January that topped any in the franchise's history
Colin Brown, president of Southeast Toyota Distributors Inc., pondered the industry mood over lunch at the Four Seasons Hotel during the J.D. Power and Associates International Automotive Roundtable. The independent five-state distributor is drawing up plans for a business slowdown — "just in case," he said. "But our business has been pretty good."
The 1,000 Ford dealers packed into a Las Vegas Hilton ballroom applauded as factory officials forecast higher truck sales in 2001, along with a higher Ford Division truck market share. "Last year," said Ford Division President Jim O'Connor, "we were held back by some constraints in engine capacity. This year, we won't have that problem."
Mike Jackson, CEO of the 406-franchise AutoNation Inc., told an audience that AutoNation's battered stock is now poised to "move significantly."
Back to basics
If anything was missing at this year's convention, it was last year's end-of-the-century giddiness. Gone last week was the frenetic barrage of the dot-com companies that dominated the 2000 convention. Absent was the anxiety-causing chatter about manufacturers shoving aside the franchise system to sell new vehicles over the Internet.
The dot-coms remained, in some muted forms. But they did not seem to herald the future.
"Last year all we heard was dot-com this and dot-com that," said Colorado dealer Barbara Vidmar as she handed over the chairmanship of the American International Automobile Dealers Association. "How many of them are here this year? How many of them are gone? Well, we're still here."
If NADA serves as a bellwether for the U.S. retail industry's year to come, this year's convention is the image of a sensible pair of shoes. As if in one collective gesture, dealers queried on the convention floor and riding hotel elevators seemed to shrug off the forecasted downturn as a temporary inconvenience.
With the dot-coms quiet and profits tougher to come by, dealers are turning their attention to old-fashioned auto-dealing basics.
"I'm paying more attention to the age of cars in my inventory," said Ray Hart, owner of a GM-Mazda dual in Idaho Falls, Idaho. "We've started an in-house promotion for our salesmen, engineered so they see the older cars on the lot again.
"I'm going to go back and work harder on my public relations skills and follow-up skills," Hart added. "I want a better-trained and -equipped service center. The car business has been hammering price for so long. You can get the same price anywhere, but consumers need the personal attention."
Joe Haughey, general manager of Fred Beans Mitsubishi in Doylestown, Pa., said his store is tightening up by staying on top of floorplanning costs. "We may start cutting costs in direct mail. But we'll live with the costs of taking care of the customers."
Brian Kendrick, CEO of Asbury Automotive Group in Stamford, Conn., said his chain could easily knock 20 percent out of its spending by trimming advertising, health care insurance and supplies. But it isn't worth it, he said.
"Profitability is about plowing every inch of your field," Kendrick said.
Oldsmobile dealers may have seen things differently. Outside the division's make meeting, a few exiting attendees high-fived the dealer, Tench Phillips Jr. of Virginia Beach, Va., who stood up in the meeting and criticized the factory for pulling the plug on the ailing icon.
Specter of death
Oldsmobile's name hovered over the convention like the spirit of a deceased relative. Even AIADA's Vidmar reminded her import dealer audience that she, too, was an Oldsmobile dealer.
"Thousands of people in southern Colorado are riding around in Oldsmobiles with the Vidmar name plastered all over the back of them," she told her fellow import dealers.
Her point may have been the point of the convention: Whatever happens, the dealer makes the most of it and keeps moving.
"I never cease to be amazed at the way in which everyone overlooks the dealer," she said. "And those who don't overlook us certainly underestimate us."