Seeing opportunity for auto industry amid COVID-19 crisis - Automotive News

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Those were the happy days — I hope they never come again," old W.C. Fields once mused in recollection. I wonder if auto dealers will look back on these pandemic times in a similar way.

The stressors of 2020 and 2021 are nothing anyone wants to relive: Shutdowns and masks and distancing and illnesses and mounting deaths and shots and swabs far up noses. Concern for the safety — and the sanity — of employees and customers has added tension to an already challenging time of political division and social unrest.

But the payoffs have come at the bottom line. High consumer demand coupled with limited supply leads to strong profits for most manufacturers and record ones for many retailers.

Some of the new ways of doing business during the coronavirus pandemic hold a lot of potential for lasting operational improvement, Steve Carlisle, General Motors' president of North America, told me last week as part of Automotive News' Congress Conversations.

Leaner inventories mean faster turns and lower floorplan costs — and they can even spur shoppers into a faster or higher-priced purchase decision. Not that GM and everyone wouldn't like to have more vehicles available for sale right now.

But in many ways, the recent experience is closer to the ideal than the old ways of pushing models on dealers, subsidizing borrowing costs and incentivizing sales.

"We have an opportunity to rebuild our inventory and our whole strategy in a completely different way," he said. "We don't need to — and certainly it's not our intention, anyway — to go back to where we were 24, 36 months ago in terms of inventory and configuration, in terms of how we manage all that."

Having lived through the experience of turning inventory faster than ever — Americans, if you can believe it, are sometimes ordering vehicles before they are built — GM and its dealers can have more confidence running leaner going forward, Carlisle said.

"We've developed a number of new tools where we can look into the product pipeline — and in ways that we never have before," he said. "We have a strategy we call 'focused ordering,' so we build what we know is going to turn and we know that we can sell."

A lot of consumers have been itching for years to do more of their car shopping on their smartphones or computers, similar to how they browse for shoes or books.

During the pandemic, a lot more dealers got on board with the idea — especially when state or local governments shut their showrooms.

"We've all experienced this tendency of the consumer to want to do more and more and more online," Carlisle said. "And that's an opportunity to address a number of pain points in the total customer experience or their journey with us from shopping to ownership to disposal and to into repurchase."

Change is hard, and changing a long-successful model isn't without risks. But giving customers the convenience and sense of control they enjoy online can improve satisfaction and loyalty for long-term business success.

"You take all that in combination and you can start to see a world that can function very differently and much better from all three perspectives — from our perspective, from a dealer perspective and most importantly, from a consumer perspective," he said.

If that's the case, these painful but profitable pandemic times could lead to more happy days again.

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