Eric Robare thought he knew how to balance supply with demand. Then the Great Recession hit, forcing him to devise a whole new game plan.
"We found ourselves in a position after the business downturn that made us realize we really needed to tighten up our processes for inventory management and control," said Robare, sales manager of Kelly BMW in Columbus, Ohio.
Robare and many other dealership managers learned to pay close attention to inventory management during the recession. But then as the economy recovered and new-vehicle sales soared, some got away from that discipline as they became more confident that cars and trucks on their lots would find buyers.
Today, even as the pace of volume growth slows, some automakers have continued to crank up production, in some cases creating a glut. When that happens, those factories urge dealers to take more cars, through incentives, strong-arming or both.
But for dealers, too much of something isn't always a good thing. So smart dealership managers are remembering the lessons they learned. For them, stocking the right vehicles at the right time allows their stores to turn inventory quickly and profitably.
"We frankly don't accept as much inventory as others, and it's a daily management [exercise] for us -- a big part of our DNA," said Michael Gruber, general manager of Paul Miller BMW in Wayne, N.J., about 30 miles northwest of Manhattan.