To the Editor:
It is becoming increasingly clear that the crisis in Japan will have a profound impact on inventories in the coming months. Depending on the makes and models a dealer sells, the impact will vary. For some dealers, it will be an acute shortage of product.
For others, it will mean production constraints ranging from basic trim levels to paint colors.
In the months to come, manufacturers that have invested in their distribution systems and dealers that have endeavored to understand them will fare better than others. Getting the right vehicle to the right dealer has never been more important. Conversely, the penalty for the wrong product sitting on the wrong lot has never been more punitive as that product would almost certainly sell somewhere else.
Intuitively, manufacturers that take "snapshots" on a more regular basis (weekly vs. monthly) will fare better as they react to the changes in market sooner. That assumes, however, that their systems process the data correctly.
The crisis we faced in 2008 forced dealers to understand our lending mechanisms on a wholesale and retail level. Coming to that understanding and reacting to it sooner rather than later meant the difference between survival and failure for many.
This summer many dealers will depend on their manufacturers to deliver what product there is as efficiently as possible like never before.