Car Dealership Struggles affect Carwash Businesses

“Wow.” What else can you say? One day you read 400-plus Chrysler stores are closing with possibly 400 more to follow, then, seemingly the next day, more than 1,000 General Motors stores are closing with bankruptcy files for both. It becomes a little frightening as the government bets billions of taxpayer dollars that “the plan” will work. It makes you stop and scratch your head, or maybe worse. Who would have ever thought that any industry would take a blow this hard, this fast?

One thing is obvious, nothing in or related to the car dealer industry will be the same. Being a carwash supplier who has tied itself primarily to this industry, we certainly have seen lots of unprecedented changes. While it would be easy to hang our head and feel the pressure of the situation, it’s a much more positive approach to examine our business and make sure we are doing business better than usual and being the best business we can.

After all, that is all you can control in this market. I know this sounds a little rah-rah, but the truth is that every cloud has its silver lining and the best you can do is the best you can do.

A primary challenge of handling the dealer market today is its crazy, almost schizophrenic, nature. Every time businesses have a strategy they think they can count on, circumstances change and uncertainty reigns. For example, some dealers offering popular brands who are accustomed to a lot of success are struggling now. Then there are some domestic dealers who are having the worst days of their business lives, as their stores are marked to close. Still others are seeing new opportunities with these closings.

While one dealer may perceive you to be insensitive, another may see your approach as aggressive and timely. One buyer wants a cash discount, while others will not — or cannot — make a purchase without some sort of financing help. Never has it been more critical for suppliers to understand the ownerships you are dealing with because each one is going to have a unique situation and perspective. However, getting to know your clients during a time of unprecedented personal change, sometimes occurring on a daily basis, will not be easy.

One thing is for sure, as the dealer count shrinks and the bankruptcies progress, the dealership market, which has been a very fuzzy picture for the last 10 months or so, will finally come into focus during the next few months. The dealers who didn’t get their franchise termination notices will remain and become great new opportunities because they will gain a larger piece of a smaller market. We should also see dealers who have put their long-term growth expansions on hold, including the purchase of carwash systems, begin to move forward again as some stability returns to the industry.

Another concern for the carwash industry will be the existing equipment in closing dealerships. This many dealerships closing will produce a flood of used equipment in the marketplace, including carwashes. The expectation is for more than 2,000 dealerships to be closed by the end of 2010. It doesn’t take much figuring to realize this will place a lot of carwashes in the open market that can be bought, sold or used by individuals who would normally be looking at new carwash equipment.

You can argue the point from several perspectives, but it would seem logical that anybody in the carwash industry has to be ready to deal with used equipment in their future business model or get caught unprepared.

Finally, the one certainty in all this is change. This may be the first time that such significant changes have occurred in two major industries at the same time. The sweeping changes to the car dealer and financial markets have amplified many issues.

The key to success today is recognizing market changes and then finding ways to not only deal with them, but discover advantages within them. For example, you have to believe an upcoming change will be inflation. Figuring out today how you will deal with inflation and its potential impact on the carwash industry may be pivotal to your future success.

Will you be ready for it when it comes? How will you turn it into something that helps you sell carwashes? Will the big change be something other than inflation? Whatever changes occur in the future, I still believe American ingenuity and our business strengths will persevere.

Harry Schleeter is the president of Broadway Equipment Co., a Minneapolis-based manufacturer of carwashing and polishing equipment since 1978. Harry began by running the company’s retail operations in 1988 and took over the sales team in 1999. He can be reached at 800.328.7434 or via e-mail at harry@broadwayequipment.com.