Dealers can enforce traditional inventory control procedures to prepare for the economic and industry changes surrounding floorplanning. A focus on ordering the right vehicles for each dealership also is essential.
Rita Case, CEO of Rick Case Automotive Group, in Sunrise, Fla., told Automotive News in January she’s taking her group to a “back to normal” cost structure. The past years of very low interest rates, low inventory and higher gross margins “is coming to an end.” She expects inventory levels this year to be higher than in the previous 18 months though not as high as they were in 2019. She wants to ensure her store managers do things such as enforcing traditional inventory control procedures.
Greg Dougherty, partner at accounting firm Crowe in Tampa, Fla., recommends dealers put renewed scrutiny on their sales process and vehicle ordering to make sure the cars they’re getting “make sense.” Dealers didn’t have to do as much to manage inventory in recent years, he said, so people have gotten out of practice.
