As market idles, auto dealers poised for long-term success

As market idles, auto dealers poised for long-term success

June 28th, 2009 by Lauren Gregory in Trends2009products

TODAY'S VEHICLE MARKET

The average dealership nationally has lost more than 25 percent in sales between 2008 and 2009. New vehicle sales are down 35 percent, used vehicle sales are down 15 percent and service and parts revenue has decreased nearly 7 percent.

Source: National Automobile Dealers Association, May 2009 sales trends

Not every car dealer in the area is going to survive the economic downturn, but those who do are poised for success in the long term, local retailers say.

"There'll definitely be a smaller pie, but there's also less fingers in the pie," said Joe Kirby, owner of Edd Kirby Adventure Chevrolet in Dalton, Ga.

Herb Adcox, who owns Herb Adcox Chevrolet in Chattanooga, agrees, believing that a tough market is weeding out weaker businesses and is creating more opportunities for survivors.

"It's that old saying, 'Survival of the fittest,' " Mr. Adcox said.

But in the short term, most all retailers are struggling, he said. Many are trying to switch their focus from new car sales to used car sales and service until the housing and credit markets rebound.

"The demand builds up," he said. "Cars are such a necessity."

Mr. Kirby says he is ready to capitalize on this demand as other GM and Chrysler dealers are forced to shut down through corporate restructuring. He says he has focused on improving his customers' experience.

Mr. Adcox said he, too, is digging in his heels.

"You just realize little or no profits, and try to tough it out and adjust as much as you can." he said.

PREBUL CASE AFFECTS MARKET

The local vehicles sales industry is poised for change in the wake of Prebul AutoGroup owner Joseph Prebul's legal troubles. The former auto mogul filed for bankruptcy protection for several of his Chattanooga stores and another dealership in Dalton, Ga., in February. He was forced to put the franchise rights for those stores up for sale to pay off his creditors.


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