There is some concern about a potential decline in the U.S. auto dealer and auto manufacturing industries that has everyone in the business looking for advice. There is a current glut of new vehicles, so auto buyers are happy that prices are staying low for the moment. However, this fact may point to a reduced production, which would see a likely trickle down to dealerships, parts, and even repairs. The “gently used” auto market is holding firm and many consumers are headed over to those car lots instead of the new car dealers.
The economy is riding high right now, and the current administration is pleased to take credit for it. Interest rates have increased slightly but nothing to really affect sales overall. It has been enough, however for many nervous new car buyers to lock in longer term loans while rates are low and that could put a squeeze on manufacturer and dealer profit margins for several years. There is a sense that things are about to change in the economy and while there may be no tangible reason for the sentiment, it does exist. Also, many economists are predicting the current state of low interest rates, high consumer confidence, and overall economic growth cannot continue very long.
Auto Dealer Consultant
The key to shielding your business from an external economic downturn is to build a buffer between you and it. Other potential streams of revenue should always have a place in the “on deck” circle, and if any dealership hasn’t given that some thought then they should. It’s a matter of experience because the industry has experienced the ups and downs before. For those new to the industry, this would be a good time to have a talk with a seasoned veteran. Someone who was around when auto loan interest rates were very high.
The U.S. Prime Rate on December 19, 1980 December 19, 1980 was 21.50 (U.S. Prime Rate record high)
On June 15, 2017 it was 4.25
If you think it was fun selling cars in 1980, you’re wrong.
If you own a dealership or are in management, it’s understandable that some of the current warning signs have you troubled. A prudent course of action would be to reach out to someone with longtime industry experience who also has the education and the tools to analyze a dealership’s current fiscal condition and make recommendations for the future. An auto dealer consultant such as Kirk Kleckner is just such an individual.
Kirk is a CPA, earned an MBA, and also holds certifications as an Accredited Senior Appraiser. He has earned a sterling reputation as a successful consultant to auto manufacturers and dealers over decades working in the industry. He is eminently qualified to make sound recommendations for the future.
Reaching Kirk Kleckner is easy, you may call 612-294-8730 or fill out a brief contact form by clicking here. Mr. Kleckner will respond promptly.