AutoNation Dealer Head Jackson Calls for Lower New Car Inventory Standards - TACH Believes in No Inventory
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But First Snide's Remarks: I have believed (and told you so) that the historicly domestic car makers could have had, and still can have, a unique selling proposition...if they ever wake up
You old timers out in TACHland remember that up until the early 1970s there was no 30 or 60 or 90 day inventory... in fact there was virtually no inventory of pre-built vanilla cars…
When a buyer wanted a new car they went to the dealer, test drove a salesman’s demo and then sat down with their salesperson and actually spec’d out the car that met their needs and desires.
In those “old days” even before today's computer driven and ingrained just-in-time manufacturing, it took just 6-8 weeks to spec out, order and then take delivery of the buyers “custom built” vehicle...the new car owner felt pretty good about the car because it was built to spec for them...(today ordering a truck is still that way and check out the domestics share of that segment).
And then came along the tsunami that changed everything…off shore car builders, who could not compete logistically against the home court advantage of the domestics, brought over boatloads and boatloads of many months old white cars each equipped the same way with virtually no options for the buyer to choose and changed the way Americans bought cars.
No custom built car built for each customer, in fact after the change there was no anticipatory 6-8 week wait for the “right” car…instead of taking advantage of their home court advantage, the domestics listened to the bean counters who thought this was a good way to save costs and pushed their car companies to play the mass produce and then "load the lot up" with inventory game, and the rest is history.
Instead of careful measured purchase consideration by car buyers, and resultant excited anticipation, North American car buyers were swept up (without choice) into the buy it-now get it now, whirlwind of hustle and became part of the "move the iron off the lot" method of car marketing... not good for 99% of new car buyers and definitely not good for the domestics...
But it’s not too late...the home court advantage can become the norm if only the executives at the car companies would once again respect their products and the customers buying them. What do you think? msnide@theautochannel.com
Washington DC October 9, 2009; The AIADA newsletter reported that the restructuring of the U.S. auto industry should include a new standard for inventory levels, according to AutoNation Inc. CEO Mike Jackson.
Automotive News reports that Jackson said he thinks automakers should maintain a 30-day supply of inventory, half of the 60 days' worth recommended by analysts. "It has been the mantra for 50 years," Jackson said yesterday in an address at Nova Southeastern University in Fort Lauderdale, Fla. "What other business accepts the same benchmark for 50, 60 years and says, 'That's fine.'"
Jackson advocated more just-in-time delivery linked to demand, like the parts delivery automakers often insist on for their plants. "As soon as you put the parts together in a vehicle, nobody cares if it sits there for 90 days.
And how you can get those ideas together in the same head is beyond me," he said. AutoNation, of Fort Lauderdale, ranks No. 1 on Automotive News' list of the top 125 dealer groups in the United States. It has 207 locations and sold 255,843 new retail units in 2008.
