INVENTORY, FACILITY REQUIREMENTS ARE TOP DEALER CONCERNS

February 9, 2008—High inventory costs and manufacturers’ facility requirements were key issues for a dealer panel at the J.D. Power Automotive Roundtable yesterday. 

“The cost of real estate has skyrocketed,” so storing a lot of cars doesn’t make sense, says AutoNation president and chief operating officer Michael Maroone. Inventory levels of  30 days are too high for domestic models, and “you just can’t stock low-turnover models,” Maroone said. The panelists—who also included Tamara Darvish, vice president, Darcars; Sidney DeBoer, chairman and CEO, Lithia Motors; and Thomas “Mack” McLarty III, vice chairman, RLJ-McLarty-Landers Automotive Group—want more info from automakers so they can make better ordering decisions.

Dealers also want automakers to be more realistic and flexible in their facility requirements, like OK’ing double shifts in the service bays instead of demanding that dealers build bigger facilities.

Some manufacturers’ facility requirements are tied to higher sales than have been forecast for this year, Maroone added. Roundtable speaker Mark LaNeve, GM vice president, vehicle sales, service, and marketing, agreed—“for years, manufacturers have encouraged overbuilding”—adding that GM has recently been more flexible in its size requirements.

Among other top roundtable concerns were attracting and keeping talented women and minority employees. For one thing, women bring a different perspective, said Darvish. “We are far better multi-taskers. And we care more deeply about the human side of the car business than the process.”