There aren't many folks in the automobile business who can remember a time when there weren't enough cars and trucks to go around.
For as long as most of us can remember, the job has been to sell all the vehicles and not worry about replacing them. The hauler was just around the corner with another load.
Don't ever let a prospect out the door without a deal. It was and is a very competitive business, and every sale was important.
Well, the earthquake and tsunami in Japan changed all that around the world. There is no longer an unlimited supply of cars and trucks. That will require a change in the way we do business in North America.
For the foreseeable future, it probably will change the way cars and trucks are sold around the world.
If you are not sure when you will get another model like the one you have on your lot, you might not want to take the first deal just to move the iron. Today you might want to show restraint to make sure you maximize your grosses since you may not have an opportunity to sell as many vehicles as you thought. Supplies are tight, and this condition might last a few months or more.
It takes a different mentality to understand that there will be a limited amount of product and, as always, far fewer of the hot models, so there should be an attempt to maximize grosses, not volume.
For the consumer it will mean higher prices, and for the dealer it may or may not mean more profit. If the supply is a lot less, there will be higher unit profits but not total profit.
Historically, the biggest problem was too much supply with no way to stop the trucks from arriving. During the last spike in gasoline prices, it meant trying to reduce inventory without worrying about higher grosses.
There are going to be some obvious shortages, particularly among the Japanese manufacturers. But parts shortages are affecting assembly lines around the world in places that no one would expect. And we'll see a lot of unusual product configurations as manufacturers scramble to re-equip vehicles with available parts.
It will take a different frame of mind. "Patience" is the watchword. Before long, the spigot will be turned back on, and everything will go back to the way it was. But not just yet.