ATLANTA — No so long ago, auto buyers stumbled over themselves — and sometimes their own financial well-being — to get new rides.
They raced through lease paperwork, grabbed easy credit and nodded wildly when asked about home-equity loans to cover monthly vehicle payments.
Of course, that was before consumers had their feet yanked off the economic pedal, leaving a lot less love on dealer lots.
Now, dealers across the nation are scrambling to rework their businesses to survive one of the industry’s roughest slumps in decades. Depending on the dealership, customers are likely to notice the changes, from fewer vehicles available on lots to harder-charging salespeople and more pressure to pull into dealer service bays, typically a source of higher profit margins.
Some changes may be further reaching. One of the nation’s biggest dealership groups, Asbury Automotive Group, which is moving its headquarters from New York to Duluth, Ga., is preparing to add salary to what had been largely commission-only compensation of its salespeople.
It’s an attempt to help talented employees get through the current hungry times, said chief executive Charles Oglesby, who previously oversaw the group’s Nalley Automotive Group in metro Atlanta.
But he said he’s hoping it will stick, even after the market improves, leading to higher pay for salespeople overall and easing pressure to negotiate a fast deal.
Most dealers, though, would be happy just to get through the industry’s immediate pain.
Steve Rayman, who has ownership stakes in nine dealerships, including five in metro Atlanta, has been in the auto business 30 years.
“It’s the toughest I’ve seen,” he said of the current market. Sales are half what they were just a year ago, he said. “It’s mind boggling.”
Every month a vehicle sits unsold adds more financing expenses for the dealer.
“Our new-car departments are terrible. We are losing a lot of money. There really is no net profit,” Rayman said. “When customers come in the dealership now we are a lot more aggressive. We have got to put every customer in a car.”
The economy slowed. Lenders cut back on credit for buyers. Gas prices surged. Banks and lending arms of automakers opted to curb or eliminate leasing options that in the past enabled consumers to get more expensive vehicles and keep them for shorter periods.
At the same time, many manufacturers — particularly domestic makers — are teetering after a stunning shift in the kinds of vehicles consumers want to buy: smaller, more efficient cars.
