Pub. 3 2021 issue 1

14 Planning, Preparing and Pivoting A s the first quarter of 2021 ends, the end of the pandemic is beginning to look like it might be closer than anyone thought as recently as January. A new president is in the White House, three vaccines have been approved for use, and medical professionals throughout the nation are getting those vaccines into people at an accelerating rate. The country is moving closer to herd immunity every day. As a result, analysts and industry executives expect strong demand as the economy stabilizes. Early forecasts predict vehicle sales between 15.6 million and 16 million. One of the most surprising aspects of the last year is that profits have been high, strong and consistent. When the country stopped in March, including the automotive industry, no one saw that coming. What is the best way to plan, prepare and pivot? The answer will depend on your specific circumstances, so the first step is assessing your current situation. To start, answer a few basic questions: • How has your year been for your dealership? • Is it better, worse or the way you thought it would be? • What does the data tell you? • What should you do next? According to attendees at a recent NADA webinar about planning, preparing and pivoting for 2021, 78% of the dealerships were having a better year, 13% were having the kind of year they expected, and 9% were struggling more than expected. As you move through 2021, ask yourself the following questions: • Where are your best opportunities? • What changes in customer buying behaviors have taken place? • How can you adapt to meet customer’s evolving expectations more effectively? Members of the industry obviously want the numbers to continue to go up. For that to happen, though, now is the time to work smarter and put the necessary processes into place. In the spring of 2020, before the pandemic, dealers had plenty of inventory on their lots and a great deal of sales activity. It was hard to find a place to park on some dealership lots because so many cars were already parked there, ready to purchase. That ended during the late spring and summer when factories had been shut down. According to IHS Markit, factory output decreased by 2.538 million units. The percent growth, year over year, dropped by 16.4% from the forecasts. Suddenly, there weren’t as many new vehicles on the lot. Inventories were lowest in June, especially on the truck side of the market. The vehicle forecast for 2021 is promising. Although the numbers are down, they aren’t terrible, either. IHS Markit has stated that percent growth year over year is expected to be up by 8.8%, although the number of vehicles being built will still have dropped by 1.043 million units from the pre-pandemic