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July in Review... Increased Volume - Huge Profits

August 17, 2010

As we wrap up the July ACAR Reports, my first thought is increased volume equals big profits.  A number of dealers had a very profitable July, several with record profits.  With all of the cutbacks over the last two years, the expense structure is drilled in and increased gross is flowing to the bottom line.

Not everyone had a big month, but it was much better than June.  It was by far the best overall month since March.  I know a lot of dealers were very focused on how to keep 2010 profits up over 2009 profits as they entered the months where we had Cash for Clunkers last year.  It will be interesting to see how August compares.

It has still been a strange year.  There is no definitive trend that says the majority of new sales are up or used sales are down for dealers.  Each individual dealership, regardless of manufacturer, is making gains in different directions.  It depends on their market, strengths and where they are focusing the most attention.  Each dealership needs to determine what ingredients work for them.

We are now preparing an increased number of projections for dealers looking to add dealerships due to many of our customers having sold or closed their weaker locations.  We have, and can, prepare a historical analysis and build an ACAR Profit Planner for the future as you go forward and analyze these opportunities. 

As you go into August, I suggest watching your used inventories as you enter the last quarter and make sure everything over 60 days old is gone.  Don’t start hiring a bunch of employees or loosen your grip on the purse strings because you have had a couple of good months.  It could be a very bleak 4th quarter, so stay lean and make sure you are banking your current profits.
Keep Focused and Have a Great August.