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Tuesday, August 4, 2009

Out of Control

Out of Control
8-4-09 Apex NC…
There is nothing more challenging in any business than to hurry up and wait. When something is pending there are always a lot of variables. As the Democrats and Republicans make this clunker deal a message on health care, the dealerships across the country have pending oppotunities, and not just a few but thousands. Charlie Customer brought in his 2000 Clunkerr LX, last weekend and is sitting at home waiting to pick up his 2009 BrandX. But nothing is happening as the days quickly go by. It could be a week to 10 days before the Senate reviews the additional funding that was quickly approved by the House; and as we all know, days kill deals. The new car, now days out of detail, is gathering dust.

One dealer principal summed it up. “I thought this thing would last through November, not through the middle of last week.” With the stores across the country, working bell-to-bell to deal with a stimulus program that ACTUALLY is working, no one anticipated this short-sighted wall built by Congress. A little homework was all that was needed. The model, in both Germany and China, has stimulated sales in a tough global environment. Did Congress look that far? Or did they simply throw a billion on the wall to see if it would stick? My guess is the latter. This thing is now a political battle out of control.

Now the dilemma of the moment for sales managers is this; will the customers affected hang in or will they get cold feet, give up, and continue to drive their Clunkerr LX’s until the cows come home? People buy on emotion, and motion creates emotion. So anything in a car deal that kills emotion usually is pretty deadly. Resuscitation is never easy. The success comes from momentum. And right now that has dried up with the car deals pending approval.

Time will tell the tale. But of all the stimulus programs that have helped to ensure the trillion dollar deficit, the Cash/Clunker Law had the most promise to help Middle America and support local economies; now, not so much.

The simple formula is to create buyers who create confidence and that builds the incentive to purchase. Down payments of up to $4500, backed by the government, seemed like a no brainer.

Let’s hope some good news come out of this. But for the car business, it’s still out of control.

The auto industry gets kicked in the can one more time; revival again replaced by survival.

We smelled economic recovery… Now we just smell Congress. People are getting more vocal about the mistakes made by our elected officials. Stay tuned. This will be more interesting soon.

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