Bailout food for thought

[cantfind12]

I must admit being in the auto business in these times is quite worrisome,however, as I hash through statistics that have stuck in my brain since I became a "car guy" I am not surprised at the current dynamic. Here is an excerpt from the NCPA from years ago.

Today's average new house is twice as large as one built just after World War II.

The U. S. now has more registered motor vehicles than licensed drivers.

The average American now consumes twice as many goods and services as in 1950 in fact, the poorest fifth of the population today consumes more than the typical family did in 1955.

If I recall correctly there was a stat a while back that said the average vehicle buyer wanted to own their vehicle for five years after it is paid off.

I'm not sure it was inferior manufacturing or poor model choices that brought this on so much as it is people realizing their consumption is out of control.

I realize this is biased since I am a fixed ops guy but since cars aren't selling maybe we should focus on parts and service these days.

[cantfind12]

P.S. After I sent this post I tripped over the How Many Signals post. My kudos to a highly spirited and intelligent debate. How can the above theory come into play with that discourse? Love to hear back.

[Richard]

I'm also in Fixed Ops; but my point has been for years that if you're NOT concentrating on Fixed Ops, you're not going to be in business long. I've preached Fixed Coverage so long that many around me think it's my religion (and they would be right!). You cannot have a strong operation and a weak Fixed Ops, it just doesn't work. Improving your fixed coverage helps not only in the hard times we have now, but in a boom can help your sales department be able to advertise more, and have more freedom in their selling techniques. Having a store where 80% + of the overhead is covered HAS to be a relief to the owner/DP as well.

[possum]

Then why does Fixed ops pay the price with layoffs when the net from those departments hasn't dropped?

[cantfind12]

This is an age old arguement not limited to our industry. It is the classic Chicken and Egg scenario. The pendulum swings giving either side its validity. Without product being in the market there is no need for service or parts (in our case). But when everyone "has one" and the need to replace it is not urgent the maintenance dynamic comes into play. Herein lies the clash between filling a need and creating one. Marketing and sales creates a need fixed ops fills a need (this is where built in obsolence come into play). More on that later. I believe these times are where the two ideaologies are in conflict. It has happeneed before and will happen again. Hopefully we will all endure and become stronger.