By. Chris Poulos, HADA Chairman, West Point Lincoln of Sugar Land and West Point Buick/GMC, West Point Lincoln.
I was encouraged recently by the first quarter sales report by INFONATION, Inc. It showed Houston Region Total Sales were up in Q1-2022 at 70,491 units, a “significant uptick” compared to Q4-2021 at 61,337 units sold. That is still down slightly from Q1-2021 sales at 74,078 units. But, considering the roller-coaster ride we have been on the past year, I believe we are trending in the right direction, particularly for dealers.
However, the report pointed out: “It seems the auto industry can’t catch a break. The challenges of new car sticker price shock, supply chain issues, the microchip shortage, and even a large cargo ship carrying 4,000+ luxury vehicles catching fire and sinking to the bottom of the Atlantic Ocean remain an ‘Achilles Heel’. Let us hope the rest of 2022 can course correct and set the ‘ship’ into smoother waters.”
We can hope and even though we have seen some easing in spots of the inventory problem, I don’t see it ending any time soon. Thankfully, dealers have been able to figure it out, and, frankly, I think this is a business model we can work with.
We are clearly ‘retail ordering’ as many vehicles as we can. If clients want certain models that we don’t have in stock, we will do retail orders on those units. Customers for the most part are patient. We do have clients that are unwilling to wait which has created some additional demands for certain models that are not available on the new car market or the preowned market, like a Jeep Grand Cherokee or the Grand Wagoneer. They are probably going to have to wait or go get something else.
What’s important is that we have to internally understand that we have to create the push to drive volume within our stores and not just wait on orders. I think that can be a trap we can all fall into, especially with the margins we are getting today.
You still have to keep selling. You can’t forget what we come here to do every day. And like any other time – you cannot ignore in good times what you don’t ignore in bad times.
We also need to be mindful of our processes internally because theft is becoming prevalent again on dealer lots. The good news is the Houston Region’s Sales are quite a bit better than US national sales.
As the covid pandemic becomes kind of an afterthought, at least in Houston, it’s still worth noting that it has not gone away and new outbreaks in China have the potential of impacting supply issues. But, I’m not going to stop what I’m doing on a day-to-day basis.
For your association, it has been a good spring. Coming off a highly successful Houston Auto and Boat show, which it looks like we will do again next year, HADA just had a well-attended spring luncheon where our guest speaker, Houston Police Chief Troy Finner, got a standing ovation.
We are also planning a June 14 reception for Texas Gov. Greg Abbott. We will be sending out invitations soon, and we are looking for a big turnout for the governor who has long been a pro-dealer. It is our chance to make sure our voices are heard.
So, as we cruise into warmer weather and, hopefully, “smoother waters,” I remain optimistic that dealers will continue to show the resilience and ingenuity that has allowed us to survive and prosper.