Dealers ferret out cost cuts to prepare for leaner times

As dealers prepare for a year of narrowing margins and declining sales, cost scrutiny comes down to rethinking expenses as basic as bottled water.Rick Ricart, president of Ricart Automotive Group in Columbus, Ohio, stopped buying bottled water for his stores, and the relatively small change saves the company $6,000 a year."We have water fountains. And we can provide paper cups if we need to because those are 1 cent each, and the bottles of water were 39 cents," said Ricart.As interest rates rise and expenses escalate, dealers are poring over their balance sheets to determine where they can cut costs. Dealer after dealer at last month's NADA Show in San Francisco talked about buckling down on the basics in light of economic headwinds they see coming their way. While U.S. light-vehicle sales have been historically strong — 17.3 million vehicles in 2018, the industry's fourth-best year ever — demand is expected to dip in 2019, with sales forecast in the high 16 million-vehicle range. During the first 11 months of 2018, expenses for the average dealership grew 5.2 percent, while total operating profit declined 74 percent, according to NADA.

Dealers ferret out cost cuts to prepare for leaner times

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