Dealerscope recently spoke with Bob Cole, president of Bob & Ron's World Wide Stereo, Hatfield, Pa.; George Manlove, CEO and President, Vann's, Missoula, Mont.; Daniel Pidgeon, CFO, Starpower, Dallas; and Michael Perlman of BrandsMart USA to find out how they're dealing with the down economy. Here are some outtakes, which we hope will help other dealers in developing their survival strategies. Keep your eye on Dealerscope.com for more strategies and look for the full round-table report in the December issue of Dealerscope.
Dealerscope: How has the credit freeze impacted your business?
Pidgeon: We have not noticed any meaningful changes in our manufacturing relationships. We do find that manufacturers are very focused right now on preserving market share in business. Yet they seem to be a little squeamish on cooperative dollars and dollars that help bring recovery.
We do offer in-store credit through a third party. There doesn’t seem to be much effect on that; most of our business is done on a cash or paid-in-full basis by the consumer. We have noticed a slight increase in consumer financing, but there really hasn’t been a noticeable increase in default rates or approvals. What we have noticed is an increase in promotional costs. Even as the prime rate is dropping, our costs to use promotions, such as the no-interest promotions, are rising, which is concerning.