Looking Ahead and Finding the Silverlining

Regardless of who you voted for in this election, I think we all look forward to a time when politics takes up less oxygen in the room. I know we still face some issues, but this too will pass and allow dealers to focus on business operations and opportunities, which are looking up.

Though sales are down from last year, as expected, the latest TexAuto Facts Report from InfoNation, Inc., showed a jump in third quarter sales for the Houston Region over the second quarter. According to the report:

• “Houston Region Total Sales were up in Q3-2020 at 59,617 units compared to Q2-2020 at 42,768 units sold and down compared to Q3-2019 at 69,543 units.”
• The Houston Region Retail Sales for Q3-2020 were up at 55,404 units compared to Q2-2020 at 40,539 units, and down with 57,642 units sold in Q3-2019.

The report also pointed out that the Houston Region is still performing better in Total Sales compared to the US National Auto Sales for 2020 (YTD). Plus, it continues to “remain cautiously optimistic for increased sales” for Q4-2020, despite the challenge of winter approaching and the covid-19 pandemic still in question.

However, as I write this column, the stock market is surging to a new record due to the news of successful Covid-19 vaccines, which could be available in the near future.  This is probably wonderful news for everybody. Closer to home, the energy sector seems to be pricing in an increase in petroleum prices that helps our Houston economy.

I’m also going to add to the sales report and say that our store, Monument Chevrolet, has a fantastic opportunity to beat Q-1, Q-2, and Q-3! As a General Motors dealer, we are a phoenix rising from the ashes of a severely low inventory position this summer brought on by the 39-days strike against GM, Covid-related production shutdowns, and a tumultuous return to production.

Of course, everybody had inventory problems this year. It will be a slow row to hoe to get your sales rate in balance with earned inventory and supply. Over the summer, we enjoyed fantastic PVR in both the new and used—new due to never-before-seen low inventory and in used because of the five-month run of increasing wholesale values.  However, we’re already seeing that near-normalcy is returning.

I expect our body shop and service departments to pick up as more people get back on the road. Driving home recently, I have sat in more traffic than seen in a year and a half. I’m also encouraged by additional businesses reopening and expanded capacity allocations.

I think we are seeing people’s ability to continue to adapt and learn how to make reasonable modifications to their life but not shut down.  We are starting to see the balance between practicality and safety as to how to operate in a Covid environment. This virus is not behind us but I think the measures people are taking are a smart alternative to complete closure. With a recent announcement in Pfizer and Moderna’s vaccines, there may be an end in sight, even if not immediate.

For the most part, people are taking practical precautions and businesses have stepped up and tried to find a way to make it work. Dealerships continue to make safety a top priority with a variety of measures recommended by the CDC.

Your HADA Board of Directors continues to meet and plan for the upcoming legislative session and next year’s Houston Auto Show. There is still too much uncertainty to move forward with January Auto Show dates, so nothing is settled at the moment. However, remember, your association has your back.  HADA members can draw on their local, state and national associations as a strong resource and advocate.

As I sign off on this most unusual of years, I am encouraged by how people and businesses have revised their practices and routines to meet these new and daunting challenges. It is why I am confident the way forward is up.

Looking forward to a great fourth quarter and a much happier New Year!

– W.C. Smith – Monument Chevrolet