Is The Car Business Really That Bad?

The author of this article is Jim Edwards. Jim is a friend and someone that I consider one of my mentors in the automotive industry. He wrote the following observation about a recent experience at a car dealership and I wanted to share it with you. I hope you enjoy it and have a Merry Christmas! Tracy

Is the Car Business Really That Bad?

Two months ago, my car club was holding its annual open car show at a large dealership in my area of the state. This event draws hundreds of owners eager to show off their cars, whether they be genuine show cars and "trailer queens" or daily drivers that have been spruced up for the event. All of these cars are of the same brand or marque' of the hosting dealership. And many, many of these cars are worth well north of 6 figures.

That being the backdrop, I too was present with two fairly rare iterations of that particular manufacturer's brand and together worth somewhat north of $60,000.00. However, being a bit of a car nut, having another vehicle in my garage is always a good thing and lo and behold, I spot a vehicle from that dealer's inventory sitting there just calling out my name.

So, with all these folks showing off their pride and joy and the spectators who've come to see the shiny paint and chrome, the dealership has a fairly large contingent of sales folks on premises that day. So I mosey on over to that sparkling red car and sit down, smelling the new leather, checking out the shifter, etc. I exit the car and ask one of the dealership's employees (they all dutifully had name tags) if he could tell me what it'd take to purchase that very car, that day! Keep in mind this event was in September of 2007 and the vehicle of my desire was a 2007. I believe we call that "aged inventory"? So, he says that he works in accessories and can't help me! Can't help me? I ask again if he could use his walkie-talkie and get someone in "sales" to walk down and discuss this car with me and I point out to him my two show cars and where I'll be located. All of this occurring at around 9:30am.

A couple of hours pass and no one has sought me out, so I spot yet another employee dutifully attired in his logo-wear and nametag and repeat my query. His response was that I'd need to walk up to the showroom and ask for the sales manager! Again, naively thinking I'm a "customer" here, I ask if he'd use his walkie talkie to have someone come and chat about the car. He nominally nods his head and rides off on his golf cart. Another hour passes and not one soul has yet to approach me! Even being somewhat disgusted, I flag down yet a third individual…they're getting easier to find each time with their attire and nametag. So for the third time in nearly as many hours I ask again if someone will come and discuss this vehicle that I've indicated I want a price on today and if the price is right, I'm leaving with the car title in my hands! A third request and for the third time, no one…not one soul…not one human being ever approaches me and at show's end that afternoon at 4:00pm, I leave with the same two cars I brought in earlier that same day.

Frankly, I'm flabbergasted but not angry. I have several automobiles and really don't need another, but given that I'm in the automotive business, I thought I'd be doing a kindness to contact the general sales manager of that large dealership with an account of my experience while on his property. So after several e-mails and phone tag, I finally said in an e-mail that I thought this information might be a good sales tool for the obligatory Monday morning sales meetings. He agreed, but there was no further follow-up from him or anyone at the dealership.
Six weeks have passed and on a gorgeous October morning, I'm out cruising in one of my cars (a convertible) and I pull into that same dealership to see what new toys they might have on display. As I enter the large showroom, guess what I spot on display? Yes indeed, that very same car I'd lusted over six weeks prior and unless someone has managed to invent a true time machine, as it sat there it was still of the 2007 vintage and six weeks older than when I first spied it! I've read a lot of trade magazines on what aged inventory costs a dealer and so what I'm seeing now is an older car, one that has cost the dealer money, has depreciated in value since the 2008's are on the floor, but there she sat. Still a'gleaming and still calling out my name.

I attempt to garner the attention of a salesperson and indicate that I might have interest in the car if they'd want to give me (my words) "way too much money" in trade for my one-owner, low mileage convertible. With incredulity, I observed as this salesperson literally chuckled, turned and walked away! I'm thinking I must be in some parallel universe where "selling" really means "don't sell" or something. So, I return home and send another e-mail to the general manager, not relating the events of that morning, but asking him what he'd take for the car. One week later, no call, no e-mail…virtually nothing!

Now, lest the reader think this incident was isolated, over that same period of time, I was watching e-Bay for 2007 models and again, was love-struck by one being offered by a yet another franchise dealer of the same brand vehicle. This too was "aged" inventory because one of the pictures in the e-Bay ad actually gave a readable view of the plate in the doorjamb. This vehicle was well over 12 months since manufacture. So! I e-mailed the contact listed and asked if he'd consider an offer. I received a nondescript response of yes so an offer I made. Keep in mind I hadn't hidden from him my occupation in the automotive business. But I figured I'd start low, he'd submit a counter-offer and perhaps we might meet in the proverbial "middle" and a deal could be done. Instead, I received a blistering, scathing e-mail in response suggesting that I was an idiot, a fool or worse! Instead of blowing up, my response to this person (notice here I've not mentioned the word salesperson) was to wish him well in his new career since I was certain he couldn't possibly survive in the car business.

Shortly thereafter, I spotted another vehicle of the same brand at a dealership quite close to my home. The price was close to being what I wanted to put into such a vehicle so I mailed my contact there. I told them that I resided quite close, would like to run over the following day and take a brief test drive and maybe do a deal. The e-mail I received in response said that "we don't like to put a lot of miles on cars like this so if you come over, come prepared to buy before the test drive". And yes readers, this too was aged, 2007 inventory! Guess who didn't bother to even respond to that e-mail, much less drive over to actually see the car?

So, is the car business bad or are car businesses really that bad? Frankly, I'm inclined to lean towards the latter in that question rather than the former! At one dealership I gave 4 different "sales persons" an opportunity to sell aged inventory and likewise, I gave two others two more chances. That's six opportunities gone awry in my estimation. Six chances for aged inventory to be off the floorplan, six chances to purchase new inventory, six chances at some profit and perhaps even some back-end product sales. In short, six chances to make one customer happy, earn a living for the sales person and to put money into the coffers of that dealership. Six chances shot!

How many "chances" are being lost to dealers? How many times will someone take the time to let the GSM or dealer principle know of a genuine failure to follow-up and make a sale to a very willing and in my case, a very capable individual with the means to either purchase in cash or qualify for the very best interest rate available on a given day?

As a former military officer, I was told that you had to "inspect what you expect"! Are you "inspecting" your dealership? Do you know how your sales staff responds to inquiries? Are e-mails even being responded to? If so, who vets them for language, spelling, tone or even attitude? I've made inquiries via e-mail to dealerships and never once had a response. NEVER!
The car business is good! Many car businesses are not from my observations. And yet we hear the moaning and groaning about how "bad" the car business is here in 2007! Those that prosper would never, ever allow my recent experiences to happen and if they did, they'd respond in some fashion to ensure that even if I didn't buy this time, I'd keep them in mind when ready in the future.

I took the time to "pen" this article because I love the car business and my livelihood depends on the success of dealers. But I also wrote this to provide a lesson to anyone who bothers to read it from beginning to end. Don't fritter away a sale! Don't underestimate a customer's desire or ability to purchase and for the love of Pete, don't denigrate or insult a potential buyer and if you can't respond or respond civilly to an e-mail inquiry, shut down your e-mail accounts!
The author: James L. (Jim) Edwards is the CEO of the Carolinas Independent Automobile Dealers Association, representing over 3,000 licensed dealerships in North and South Carolina. CIADA is the largest association of its kind in the nation and Jim has served as the CEO for eight years.

ABOUT THE AUTHOR OF "MINDLESS MUSINGS FROM THE MAXX" - Tracy Myers is the owner of Frank Myers Auto Maxx (Winston-Salem & High Point, NC) and Uncle Frank's Auto Approval Center (Winston-Salem, NC). He is a Certified Master Dealer, the National Quality Dealer of the Year and one of top 28 dealerships in the Nation. He is also the author of "Eight Keys to a Better Car Deal" and the best selling book "Car Buying Secrets Exposed - The Dirty Little Secrets of a Used Car Dealer", both available at Amazon.com
Visit Frank Myers Auto Maxx on the internet at frankmyersauto.com