Those were the happy days — I hope they never come again," old W.C. Fields once mused in recollection. I wonder if auto dealers will look back on these pandemic times in a similar way.
The stressors of 2020 and 2021 are nothing anyone wants to relive: Shutdowns and masks and distancing and illnesses and mounting deaths and shots and swabs far up noses. Concern for the safety — and the sanity — of employees and customers has added tension to an already challenging time of political division and social unrest.
But the payoffs have come at the bottom line. High consumer demand coupled with limited supply leads to strong profits for most manufacturers and record ones for many retailers.
Some of the new ways of doing business during the coronavirus pandemic hold a lot of potential for lasting operational improvement, Steve Carlisle, General Motors' president of North America, told me last week as part of Automotive News' Congress Conversations.
Leaner inventories mean faster turns and lower floorplan costs — and they can even spur shoppers into a faster or higher-priced purchase decision. Not that GM and everyone wouldn't like to have more vehicles available for sale right now.
But in many ways, the recent experience is closer to the ideal than the old ways of pushing models on dealers, subsidizing borrowing costs and incentivizing sales.
"We have an opportunity to rebuild our inventory and our whole strategy in a completely different way," he said. "We don't need to — and certainly it's not our intention, anyway — to go back to where we were 24, 36 months ago in terms of inventory and configuration, in terms of how we manage all that."
Having lived through the experience of turning inventory faster than ever — Americans, if you can believe it, are sometimes ordering vehicles before they are built — GM and its dealers can have more confidence running leaner going forward, Carlisle said.
"We've developed a number of new tools where we can look into the product pipeline — and in ways that we never have before," he said. "We have a strategy we call 'focused ordering,' so we build what we know is going to turn and we know that we can sell."