The 5 Things Dealers and OEMS Can Do to Stay on Top During the Next Downturn, from Ask The Manager.
I hate to be the bearer of bad news, but the next down market in automotive retail is coming. No one knows precisely when – and none of us is certain what will trigger it – but, it is coming. Moreover, given the current market realities, it might be coming a little faster than most of us in the industry imagine. Take, for example, these fast facts:
- The average length of a new car loan in 2014 was 66 months.
- The number of subprime borrowers missing payments is at the highest level in over 6 years.
- We saw a softening of overall (non-automotive) retail sales beginning in the fourth quarter.
- Roughly 56% of American adults do not have a full-time job.
Don’t get me wrong; the car business is a great place to be in 2015… just as it was a great place to be in 2005 when the industry accounted for 16.9 million new units. Slightly higher than where I see 2015 sales; my prediction is 16.7 million. If you’re in the automotive industry, you hope I’m wrong about 2015. Heck, I hope I’m wrong about 2015. Unfortunately, hope is not a strategy.
We’re having good times in autos right now and I don’t want to become Chicken Little; but the good times won’t last… they never do.