Sales results for February were okay for some automakers, such as GM, which has a healthy crop of SUVs in its model mix. Average transaction price per vehicle also rose in February because of consumers’ preference for SUVs.
But not all automakers saw sales rise in February compared to the same month in 2016. And even those who did show sales growth often relied on incentives to make that happen. Average incentive spending per vehicle in February was up $400 on-year, according to J.D. Power.
Inventories are “starting to swell, which is concerning considering that we’re still months away from the peak summer selling season,” said Jessica Caldwell, executive director of industry analysis at Edmunds.com. Automakers are in a tricky spot, she said in a press release.
When automakers are in a tricky spot, so are dealers. Dealers are the ones who must figure out how to wield those incentive dollars. And swelling inventories combined with rising incentives can be bad news for dealerships. Still, sales should remain strong this year and dealers are smart and resourceful. It will be interesting to see what clever strategies dealers come up with to make 2017 as good a year as possible.
In this week’s issue, we have columns from several of our frequent contributors. Erin Tenner is back with advice on how to structure a buy sell agreement to avoid litigation. A key piece of advice – have some type of Owners’ Agreement. Lack of one is the most frequent source of litigation.
Also, this week, DHG returns with a very useful primer for the non-traditional buyers that are now entering the market on some of the dealership world’s unique accounting characteristics.
And of course we have Transaction News. Enjoy!