Chairman [Turns the] Corner

When David Peacock passed the Chairman’s gavel to me at the first of the year expectations were for another strong year. HADA was kicking off 2020 with our best Houston Auto Show ever, January sales were good and optimism abounded.

Then came the coronavirus.  In what can only be described as the most challenging time in memory, Houston dealers saw March sales plummet nearly 40 percent, per the Polk data provided by Effectv; and similar declines seem likely in April and May.

We don’t have second-quarter sales figures yet, but last month HADA began getting reports from numerous dealers who said they would match or beat last year’s May sales. I can’t claim the same because of a limited supply of parts and vehicles (still a worry for many dealers), but I am confident we have turned the corner and are headed toward better times.

Every day it is encouraging to see additional traffic on the road, additional businesses reopening and capacity limits expanded. This virus is not behind us but I think the measures people are taking are a smart alternative to complete closure.

I am more hopeful every week thanks to the practical precautions being taken, and I’m proud of all the businesses that have stepped up and tried to find a way to make it work. HADA and TADA should be applauded for lobbying hard to keep dealerships open as essential businesses and spreading the word through the media that dealerships were safe and clean.

Dealerships quickly made safety a top priority. Like most dealerships, our store is doing all the things that the CDC recommends. As part of the Clean GM program, we installed Plexiglass barriers where appropriate, required masks when necessary, took the temperatures of our employees as warranted, and took a number of measures to sanitize vehicles and facilities.

Will this crisis change the way we do business going forward? It has certainly accelerated some changes and stalled some others. However, our business is not new to disruption or push for change, either internally or externally. I think dealers will again do as they have in the past – adapt and thrive.

We were already seeing trends toward making car buying an easier process and I expect this to continue. We will no doubt see more pre-approved financing, insurance transactions, personalized services such as home delivery and pickup, and online sales.

Dealers are likely to update and improve their websites, and we can expect a lot more of the research and purchase process to happen online.  Remember that there isn’t one single profile of a customer.  Probably most aren’t willing today to make the second biggest purchase of their life, next to a home, without seeing and driving it first.  As an industry, we know how to do that now.  But, many want to make progress in their decision before stepping on the lot.  As an industry, we are better meeting that challenge every day.  But some want to buy, and some are buying, without stepping foot in the dealership.  As an industry, we are foolish to be caught flat-footed.

Predictions include fierce competition between dealerships in the coming months as the industry sorts all this out. As more businesses reopen and the economy improves, I believe more vehicle sales and service will follow. Even as I stare across the freeway at the Shell refinery, which has been severely hurt by a huge drop in oil prices and had a negative effect on Houston’s economy, I am confident the way forward is up.

To help navigate this “new normal” in whatever form it takes, HADA members can draw on their local, state, and national associations as a strong resource and advocate. We’ve got your back.

In closing, let me stress that it is a great honor to serve as your Chairman, as my dad, Carroll Smith, did in 1988.  Together, I strongly believe we can meet any challenge.