The Volcano Effect of the Automotive Retail Industry : The Observation from All

The prime of my automotive business consulting years were from 2007 to 2016. The last two years led me to hang my hat up and pass on the torch to former associates. Working throughout those years in retail to stay sharp and on top of the changes, I was exclusive to certain clients only. In that decade with full participation of great dealers and their teams, I built great leaders, processes and turned organizations around.

Looking back, it started in the roughest times for the industry and ended when things were "good". What is "good" though?

The definition I now understand as "good" in the automotive retail industry is maintaining and focusing solely on the bottom line with low cost staff, facilities and overall no support. It's the "Save Your Way to A Profit" business model. Some even call it "backing into a profit". Very few dealers and auto groups ever look at growing the top line and procuring talent, developing leaders or growing their brand. The risk factor for growth has become one that threatens the pockets of upper management and owners.

Therefore, take down the tattered sail, do not repair it or replace it and throw away the paddles. Let's see where we will go crew!

Having changed to consulting for very large corporate vendors of the automotive business, they are echoing the same observation. They ask me my thoughts, I tell them, they pay me. I feel ashamed for taking compensation in lieu of common insights. Well, it's not much money, but it still makes me feel bad.

These vendors all talk to staff and managers and hear the same thing. The vendors come to me and tell me what they said. "Teams and managers want leaders, want to evolve and their stores to grow." Vendors give me leads due to all these testimonials and blatant cries for help. Nothing ever transpires. Most of these dealers all state the same thing , "We are on an expense/spending freeze." OK, no problem. Thing is, from the constant communication from my former associates who are calling on these dealers, it seems this "freeze" is becoming the Ice Age.

This is what baffles me. Is a low cost, under performing, under trained team member or manager with no leadership not an expense? No one is performing up to potential as they are just happy to have a job or do not cost the company that much so it's OK. Time for a replacement? Who has sold the most or just stuck around? They are the new manager. There you go.

Stay tuned for part 2 ( the 'NADA Technician Shortage: Easy Solution' in this series of 6. )


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