Stack'em Deep

Stack'em Deep

I am so tired of hearing guys complain that business is slow, or my favorite, I can't buy any cars right now.  What about this one, I can't buy any cars right now because I am not selling any cars right now.
All of this is hog wash.  You must take responsibility for the inventory you bought.  No one forced you to raise your hand at the auction.  I have never had a Ringman put a gun to my head so I would bid on a car.  You thought that you stole the car, but it turns out you didn't.  So, now that it is 60 days old reduce the price to $1000 over and blow it out.

If your cars are not selling obviously you are either in the act of doing something wrong or you have already done something wrong.  My point is this, if no one is buying the cars in your inventory then one or more of the following things has happened.
You bought the wrongs cars, so start buying cars that sell instead of the cars you like. You are pricing the cars incorrectly, so stop trying to hit a home on every sale and start selling quantity.  You are not advertising the cars correctly, so implement an effective Internet Marketing Strategy.  Your Sales People can't close sales, so only employ closers, not friends, later the closers can become your friends.

All of these things can be fixed but you have to be willing to take responsibility for what is already done and move forward.  First and foremost, if you want to sell 10 cars per week then you must buy 10 cars per week.  How do you expect to sell 10 cars a week if you are not first buying 10 cars per week?  Sounds pretty simple but a lot of dealers cannot seem to get this through their heads.  Talk about putting the cart before the horse.
Bottom line is this, if your lot will hold 100 cars then you need to have 100 cars on your lot.  More inventory gives you more opportunities and more chances to reach more customers.  Every one of your prospects has different needs, desires, wants and budgets.  So, your inventory needs to be as plentiful and diverse as your customer base.  Selection needs to become king at your Dealership.
If you do not have the money to buy all of this inventory then check with one or more of the big three floorplan companies.  Independent dealers should look to Automotive Finance Corporation (AFC), Dealer Services Corporation (DSC), or Manheim Financial Services (MAFS) when starting out.  I have seen dealers floorplans with three or more companies.

However, some banks are willing to work with dealers if you put your house and pension up as collateral along with a personal guarantee of course.  The upside is if you can find a bank to deal with you it will save you thousands of dollars per month in fees and interest.  But if you can't get the banks to deal, then the big three floor plan companies are a great alternative.  Franchise dealers already know where to go to get their floorplans.

Nevertheless, the moral to the story is the more cars you buy, the more cars you will sell.  Remember you will only sell a percentage of what you carry in inventory, so if you carry 10 units in inventory and you sell 80% per month the most you can sell is 8 units.  On the contrary, if you have 100 units in inventory and sell the same 80% of your inventory then you are now selling 80 units per month.  Rent did not go up, payroll did not go up, but the number of sales closed and doc fees collected went up.

In conclusion, increased buying is the first step towards increasing sales.  

Thank you,
Thomas Ieracitano

Thomas@Ieracitano.com

TheDigitalCarGuy.com

Can't Make it Here, We'll Take it There!

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Electric cars are nice, but the market still wants some muscle

Electric cars are nice, but the market still wants some muscle
Chicago auto show underscores the car-buyer market's insatiable desire for power

By Paul A. Eisenstein  
msnbc.com contributor
updated 2/16/2011 7:39:38 AM ET

   This is the year of the electric car, or so one might believe based on the headlines of recent months, with new vehicles like the Chevrolet Volt plug-in hybrid and Nissan's electric Leaf racking up awards and rolling into car showrooms.
So, what should we make of this month's Chicago auto show, where potential customers will find the spotlight shining not only on the latest lithium-ion-powered wonders, but also on some of the most powerful cars ever to roll off an assembly line?
At the Chevy stand, for example, the Volt made way for the new Camaro ZL1 - a 550-horsepower version of the reborn "pony car," which General Motors' design chief Ed Welburn proclaimed "the most technically advanced Camaro ever built."

A quick walk across the vast McCormick Place convention center found Ralph Gilles, the Dodge brand's general manager, kneeling to plant a kiss on the fender of the new, 465-horsepower Dodge Charger SRT8. Gilles - who also serves as Chrysler's corporate design chief - is one of the first in line for the high-performance sedan, which traces its roots back to the pre-oil shock era of anything-goes muscle cars.
"Performance is back," Mark Reuss, GM's president of North American operations, has said on numerous occasions. Indeed, the Chevy Camaro was one of the hottest cars of 2010, notably knocking down the king of the pony-car hill, the Ford Mustang, for the first time in 25 years.
For all the attention GM has given the electric Volt, the carmaker has delivered significantly more muscle car models to market over the last year, including an assortment of Camaros, and several new versions of the Cadillac V-Series, including the 550-horsepower CTS-V Coupe.
Ford used the Detroit Auto Show, last month, to reveal several new battery-based vehicles, including an electric version of its new Focus, and the C-Max Energi, a plug-in hybrid version of its new microvan. But the automaker is also burning rubber with the new Mustang GT500, which pumps out an impressive 500 hp.

Even Toyota, which used the Detroit auto show in January to reveal a new family of Prius-badged hybrids, is getting into the action.
Its Lexus luxury division recently started deliveries of the LF-A supercar, and the Japanese automaker is getting ready to reveal, at next month's Geneva Motor Show, a new high-performance sports car developed in partnership with the smaller Japanese carmaker Subaru.

High-performance models like the Camaro, the Mustang, the Charger and the Challenger (another Dodge muscle car) collectively outsell hybrid-electric vehicles like the Toyota Prius and Ford Fusion Hybrid - the darlings of the environmental set.
But there's a caveat to that success. The highest horsepower offerings, such as the Camaro ZL1 and Charger SRT8, make up a relatively modest niche, as most car buyers opt for more mundane versions of these cars, such as the V6-powered Mustang.
 
Once derided as a "secretary's car," the Mustang's base model has only minimal muscle, yet it still delivers surprising performance - a hefty 305 hp (about 50 percent more than the top-line Mustang GT of two decades ago). But the V6-powered Mustang also gets an EPA rating of 30 miles per gallon on the highway, which underscores some of the big changes that have occurred since the days when muscle cars ruled the road.
New technologies, like turbocharging and direct injection, make it possible for cars to churn out significant amounts of power when needed, but still maintain acceptable fuel economy. The new Charger SRT8, for example, can idle half of its cylinders when the demand for power is low, significantly reducing fuel consumption.
And that's only the beginning. Mercedes-Benz is readying a pure battery-electric version of its gull-winged SLS supercar, which will debut in 2013. And little Tesla, the Silicon Valley start-up, has already sold more than 1,000 of its two-seat Roadster sports cars.
British specialty carmaker Lotus is developing an assortment of new models that will use a special hybrid driveline - initially developed for the Formula One race circuit - to punch out some extra performance while allowing the carmaker to utilize a smaller, more fuel-efficient engine.

Porsche is taking a similar approach with its 918 sports car, a race version of which was introduced at the 2011 Detroit auto show.
And while company officials won't comment, there have been numerous reports that Ford will be bringing back the legendary GT nameplate. But the new version will supposedly use supercharging and hybrid power to help it deliver 0 to 60 acceleration in barely 3 seconds.
While it's hard to find a manufacturer these days that isn't working on a battery car, plug-in or conventional hybrid, the same can be said for performance and muscle cars.
Even Hyundai, a brand traditionally known for its low-price and high mileage, is getting in on the act. During its Chicago auto show preview this year the automaker said it would add another 51 hp to its popular Genesis sedan, bumping the numbers up to 429 hp.
And with federal mileage standards set to make some big jumps in the years ahead, automakers are under pressure to squeeze more miles out of every gallon of gas - yet the market also wants them to deliver more muscle, as this year's Chicago auto show underscores. The good news is that the latest drivetrain technology is allowing the industry to do both.

Auto sales helping to drive the economy

Auto sales helping to drive the economy
February 10, 2011 |  4:10 pm

The auto industry is powering up to help the economy.
Surging car sales could boost economic growth this year by nearly a full percentage point, its biggest contribution to the economy in more than a quarter-century, according to a new analysis.
Pent-up demand from consumers who are feeling more sanguine about job security and income levels could drive sales volume to as many as 13.6 million vehicles this year, said Carl J. Riccadonna, senior U.S. economist at Deutsche Bank in New York.
That would be a 17% increase from the 11.6 million vehicles sold last year and could add as much as 0.8% to U.S. gross domestic product, the most since 1984, Riccadonna said.
The rise in car sales "appears to reflect an improvement in households' confidence in the economic outlook," Riccadonna wrote in a note to clients, adding that "households typically refrain from big-ticket purchases, such as autos, until they are more confident about their own economic prospects."
Auto sales could keep rising throughout the year as consumers feel more confident in the economy and as lenders become more generous with credit, Riccadonna said.
-- Walter Hamilton





LA Times


Thank you,
Thomas Ieracitano
229.251.2462
Thomas@Ieracitano.com
TheDigitalCarGuy.com
Can't Make it Here, We'll Take it There!

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