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Let's Make A Deal, Or Not

Auto Sales Drop
Auto Sales Drop

When I strolled into the New Orleans Convention Center this weekend for the National Auto Dealers Association annual meeting, I expected optimism.

Even in a recession, these guys are sales people. It's what they do. They could be on their death bed in the emergency room, but if the doctor needed a new car, they'd sit up and be ready with a 3 year lease.

And yes, these guys are trying to keep up a brave front, even as they face a sobering reality.

Auto sales won't rebound for some time and even when they do later this year it won't be much of a bounce. Sorry boys (and girls), but people simply aren't buying. Even when you throw more cash, 8 year loans, no interest, they are still reluctant to sign on the dotted line.

But dealers being dealers, they're still gonna try to get us.

That's why Chrysler is now offering employee pricing plus plus. That's employee pricing, plus zero percent financing, plus cash back. Hey, with sales down 53 % last month, they have to do something.

When Chrysler Vice Chairman Jim Press met with dealers yesterday, he gave it to them straight: either they order more cars and trucks so Chrysler’s plants can get up and going - or the company faces a very bleak future. The dealers got the message, and many told me they are ordering more vehicles, even though they already plenty on their lots.

This sets up what could be a terrible first quarter for either the dealers, Chrysler, or both.

If the dealers struggle to move models, they will find themselves over extended. That could mean fewer orders for Chrysler and a drop in revenue. That in turn will make it tougher for the company to convince the Treasury department that the company is viable. It is a vicious cycle that will only be broken with better sales.

These dealers aren't giving up, though it's estimated between 1,000 and 2,500 could go out of business this year.

They're ready to deal, but they still need buyers.

    • Bankruptcy fears grip U.S. auto-parts firms: report

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