Archive for September 4th, 2009

How Much Should the OEMs Help You?

September 4, 2009

j0386501In my editor’s note for our September issue (also my previous blog posting), I wonder whether the dealer closings are slowing — or have just begun. Evidence provided by ADP Lightspeed suggests the former. But some industry insiders fear another wave of closings in the fall.

If the overall unit decline through June, as reported by the MIC, is 42 percent, then dealers in pockets of the country are suffering even more. Such large declines combined with the scarcity in commercial credit means many franchised dealers are having trouble making payroll. And they are likely falling behind in their payments to some of their largest creditors, their OEMs. (Obviously I’m excluding the minority of dealers who buy their inventory outright — more on them later.)

This brings me to my main question: How much assistance should the OEMs provide to ailing dealers?