MIAMI BEACH, Fla. — Watch expenses, conserve cash and shore up your parts and service operations.
Good advice for dealers anytime.
Even better advice now, especially if a widely predicted decline in new-vehicle sales is on the horizon, says the National Association of Minority Automobile Dealers.
The nation’s largest minority dealer group drove home these simple but important points at an all-members town hall meeting during the association’s annual conference here in July, said NAMAD President Damon Lester.
Lester said NAMAD is taking industry predictions of slowing new-vehicle sales seriously and wants its members to be prepared.
About 400 minority-owned dealerships exited the industry during the last recession, he said. NAMAD doesn’t want another mass exodus, hence the warnings to be ready.
“Any processes they may need to implement as far as increasing sales and increasing throughput, increasing repair orders — they should start to do that now to build up their customer base, particularly in service and parts so they can survive any potential economic downturn,” Lester said.
“Interest rates have been at historical, all-time lows. Any kind of increase or bump in it can change a dealership’s day-to-day operations, particularly as it relates to cash flow. We learned from the recession that once a downturn hits, it’s difficult to turn things around.”
Lester describes the industrywide growth of 32 minority-owned dealerships last year to 1,128 at the end of 2015 as “modest.” That’s after three or four years of being “pretty much flat after coming out of the recession.”