The auto industry has always reflected the economy that supports it and most auto industry insiders agree that the recent consolidation of new car dealerships was necessary to maintain the equilibrium between supply and demand.  Unfortunately, the sensitive balancing act between new car supply and consumer demand was thrown off by the “success” of the Cash For Clunkers Program which artificially depleted new vehicle inventories.  Auto dealers had already cut back on new car orders to accommodate reduced sales volumes, and floor plan limits capped by shrinking working capital reserves limited the amount of new and used cars that auto dealers could keep in stock.  As a result, car dealers have not been able to timely replenish their sold inventory to maintain sales momentum and preserve profitability.  More urgently, dealers are scrambling for a way to stay ahead of fixed expenses that have already been cut to the bone.

Many automotive advertising agencies predicted that the Cash For Clunkers Program would produce an artificial wave of business with the associated “peak” in new vehicle sales during August followed by the “valley” in September that could continue through the balance of 2009.  Recent SAAR statistics project an adjusted annual sales rate of 8.8 million new vehicles in September proving that their worst fears have been realized.  Successful auto dealers focus on solutions rather than problems.  As a result, used cars have taken on a new importance with a number of creative techniques being applied to acquire used cars with a priority of selling used cars vs. new cars that are in short supply. Read the rest of this entry »

A shrinking economy has been the catalyst for reducing the amount of “brick and mortar” auto dealerships compounded by the consolidation brought about by the reorganization of General Motors and Chrysler.  The growth of the Internet Superhighway could not have been timed better, as 92% of the people buying a car are driving onto the Internet Superhighway in favor of the reduced number of car dealers on their local car row.

The car buying public will always take the path of least resistance and the Internet was already growing as the information resource of choice when selling a car or buying a car.  People selling new cars and/or used cars will naturally gravitate to where people looking to buy used cars and/or new cars are shopping, however the abrupt closing of thousands of auto dealerships across America has increased traffic to dealer websites at a faster rate than anticipated.  The result is an explosive need to improve the technology and the associated applications to enhance selling processes to facilitate buying cars and selling cars in a more efficient and cost effective manner. Read the rest of this entry »

Let me start by answering the question that most of the people reading this post will be thinking - “Are you crazy!  The economy is in the toilet and car dealerships are closing by the thousands.  Why would anyone want to start a career in the car business?”  Fortunately, I can speak from my own experience in assuring these same skeptics that I started my career selling cars in 1975 - the last time that the car business and the economy was in a downward spiral similar to this one - and I can confidently state that there couldn’t be a better time than right now.

A professional car sales person is in their own business.  When times are good it is extremely difficult to differentiate your business from the one down the street, or even the others in your own showroom.  In good times the large established dealerships have the funds to drown out small dealerships advertising campaigns.  A personal marketing message from a professional sales person trying to build his or her customer base will get drowned out by the “deal of the day” being blasted on every radio and TV station. Read the rest of this entry »

No doubt, some old school “car guys” just fell off their chair when reading the heading of this forum.  Fortunately, most of today’s professional auto salespeople recognize that an educated consumer is their best customer.  The more car buyers know about how to buy car, or even how to sell a car, the more likely they are to take the plunge despite today’s troubled economy.

Before I presume to “teach” you how to buy a car I suppose I should include my experiences that qualify me to discuss the subject.  I invested 25 + years as a General Manager and Dealer Principal before writing a few books on the auto industry.  My first book was a consumer facing shoppers guide titled “How To Buy A Car.”  Its sister book, “How To Sell A Car,” was written to address the dealer’s side of the table after being prompted by friends in the auto industry that appreciated my honest advice for car buyers to treat auto dealers with the same respect that they demanded for themselves.  The books complement each other in that they both suggest that people walk a mile in the other person’s shoes when buying or selling a car.  The past ten years have found me in the automotive advertising industry.  I am presently the President of Ad Agency Online, L.L.C., a national network of independent automotive advertising agencies, and the host of an auto industry social networking site that reviews automotive advertising technologies and shares best practices with site visitors - http://AdAgencyOnline.Net .  Hopefully, I have learned something about the auto industry over these past 35 years that I can share with you when you shop for your next car. Read the rest of this entry »

Branding in the retail automotive industry used to be the manufacturer’s job but times and consumer brand loyalties have changed.  Automotive advertising is broken down to three complimentary tiers.  Tier I is maintained by the O.E.M.s to build awareness of the brand.  Tier II is coordinated by auto dealer advertising associations to provide leveraged marketing messages to promote regional sales for the brand and the auto dealer members.  Tier III is provided by individual auto dealers challenged to promote their deal of the day with a call to action for today’s new car buyers.  Technically, Tier I, Tier II and Tier III still exist but reduced sales volumes have limited national and regional budgets.  Individual auto dealers are also limited in their ability to promote their own daily specials with a call to action and a strong retail message built on the brand recognition that was supposed to be developed by Tier I and Tier II advertising.  As a result of their limited budgets, the O.E.M.’s can’t effectively develop top of the mind awareness of their brand to place their products on the short list when a customer is ready to buy a new car.  Similarly, local auto dealer automotive advertising associations can’t afford to promote their brand value to supplement Tier I and support Tier III advertising.  Finally, since the auto dealers always depended on Tier I and Tier II to provide a “branding” message they never prioritized it in their advertising.  In today’s troubled auto industry auto dealers can’t afford to shift focus away from their own retail sales to build a brand for the O.E.M.s.  The result is that factory branding messages have been reduced which has contributed to the deterioration of their customer brand recognition and loyalty. Read the rest of this entry »

The auto industry has changed, is changing and will always be changing!  For that matter, it is widely accepted that the only constant in the auto industry is change.  On the other hand, human nature has never changed, is not changing and never will change.  Social media relies on human nature to attract an online community of likeminded individuals who come together to share their experiences.  Car shoppers use sites, like http://everycarlisted.com/ and their related social networking / blogging site http://autoindustryinsights.com/ , to talk to people who are looking to buy a new car or more often to buy a used car or even to sell a used car rather than trading it in to an auto dealership.  The ability for consumers to learn from the experience of their online friends before, during and after their sale or purchase of a new car or a used car provides a level of confidence in the buying process that is not offered by an auto dealership’s website or brick and mortar facility.  Simply put, people like to do business with people that they like.  The adversarial relationship between even the best meaning car salesperson and an understandably defensive car shopper makes it difficult to make friends whereas social media is a proven method to make friends based on their common interests - like trying to buy a car! Read the rest of this entry »

I attended and chaired a round-table on social media marketing to women car buyers at the annual M2W-Marketing to Women conference recently where the brightest and greatest minds on how to reach women spoke, networked and discussed the latest trends and strategies. It was invigorating and a nice change of pace for me to spend time mostly in the company of women who like me understand the “Power of the Purse”. I am very committed to speaking and training mostly men in the auto industry that women are not a diversity or niche market and how to improve results with women. Women are the majority of car, tire and service customers, yet at M2W it was the like singing to the choir, very few men attended the conference and ZERO men from the auto industry in attendance.

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