According to NAAMSA, December 2008 sales were down 27%. That is quite a serious number and it probably is similar to numbers around the world. That kind of drop, coupled with the already low dealer margins, stock holding building up, cost of financing the floor plan and suddenly car dealers are making losses on car sales.
What do you do? Well if you are a buyer, you bargain hunt. If you are a car owner wanting to sell, you don't. But if you are a car dealer, you need to change your business focus in a hurry.
Most car dealers have other revenue streams as well, and one they will have to focus on is the high margin service and parts departments. If you suddenly have less foot traffic on your floor and sales people are sitting idle, turn their attention to service lead generation. You already know who bought cars from you and when, give them a call and find out how they are enjoying the car, enquire about mileage and remind them when there next service is due. Offer to book them in and then call the day before and remind them.
If your salesmen are not that busy, make sure they are driving the high profile service customer to work - preferably in a demo model of the new version of that customer's car.
Selling cars does not have to be a once off transaction with a never-to-be-seen-again customer, it can be a service customer acquisition excercise. If you don't have this approach, and a dealer in your area does, your future service revenue might just be driving through their front door.
And when the economy turns. Don't stop doing any of the above!
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