Time to Join Forces


As I am writing this, the Dow Jones index has fallen, secondary lending institutions are folding, and the nation's largest prime-rate lender has had to tap into its $2 billion line of credit to stay afloat.

And as I am writing this I am working with a dealership that six months ago added two franchises to its vehicle menu of offerings.

Menu — kind of an odd term for the powersports industry. This dealership has not one product line, but several product lines from which customers can choose.

Sure, in the past you could survive with just one vehicle franchise. But I think that is indeed in the past. Based on current and predicted economic conditions, you must now move forward with your dealership, and that means you must consider adding vehicle brands, product lines and new service offerings.

Of course, that's easy to say but can be costly to do. However, if you don't at least consider adding lines, you can bet that someone else — and likely someone who's not from our industry and thus sees opportunities yet to be tapped — will open up a dealership selling these brands. And this new dealership will be located down the street from you.

The Mall Concept

A number of years ago, large metropolitan areas started to build Auto Malls. The Auto Mall — a specific commercial area zoned for affiliated and competing automotive dealerships of all sizes, types and brands — now can be found in even midsized market areas.

By concentrating dealerships in one area, the Auto Mall facilitates the shopping and buying experience for the customer: More selection, with less travel. Ease of comparison. The Auto Mall becomes a destination point — a place customers can spend an entire day.

Now, you don't have to go out and create a "Motorcycle Mall," but you should consider adding vehicle lines to your dealership, or even working in cooperation with other dealers on ways you can generate interest in your local and regional powersports markets.

STEP ONE: Venture out at least 100 miles in every direction from your dealership, and document every powersports franchise that could possibly take customers from you. (Don't forget the big-box retailers like Cabela's, too.)

STEP TWO: Buy a wall map and mark the locations that you scouted out in Step One.

STEP THREE: Determine who you know at each location. Have you already met the dealer principal or general manager? Does your service manager know the service manager at the other location?

STEP FOUR: Contact as many of the dealers as you can and ask them, "How can we work together to generate sales and increase interest in the powersports lifestyle?"

Another dealer may need the OEM vehicle line you want to get rid of, or vice versa. Still another dealer may be thinking of selling out. A third dealer might want to explore a partnership, or cooperate on finance programs. A number of dealers may want to join forces to create a regional event, or perhaps cooperate on a regional marketing and advertising program.

There are possibilities for the powersports industry that have yet to be explored. If you don't offer more products to your customers, they will go elsewhere — they may buy something other than a powersports vehicle, or they may not buy anything at all. Don't be afraid of expanding into other lines and working with other dealerships in your area. In this era, size matters.

Steven Zarwell is a dealer consultant and manages the Dealernews 20 Groups. He also is a member of the Dealernews editorial advisory board. Send questions and comments to editors@dealernews.com.