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Leaders See Both Opportunity, Uncertainty

By Jeffrey Bellant, Used Car News

Several auto industry leaders are balancing car sales, especially on the used side. But he “It’s really going to depend on how jobs
current optimism with future uncertainty pointed out the long-term forecast is still come back and whether people can afford
as the country opens up again. murky. “This recovery is going to be much cars,” he said.
different than previous economic down-
The COVID-19 pandemic remains a chal- turns,” he said. Garcia said the 2008-2009 recession taught
lenge to the industry. During a recent we- him that “when the economy has to retool, it
binar, Ernie Garcia, chairman and CEO of The recovery will look differently based on takes time.” He said questions remain about
Carvana, said, “I feel like I’m at a time where geography, and Ekizian is looking at local the future of the services sector, how much
I’ve never been less certain about what the healthcare data, local hospitalizations and businesses will have to retool and potential
next couple of months look like.” local government policymaking to help longer-term unemployment, he said.
forecast the pace of recovery. These areas
He said, “So many things are going in the will have an influence on consumer de- All agreed that businesses will have to adapt
right direction,” from wholesale volumes to mand, he said. – as they always do – to survive. Dealers,
wholesale prices and retail volumes. like other businesses, will have to operate
Jobless claims and at-risk industries will differently. From digitalization to inventory
“The ABS (asset-back securities) markets also have an effect on the direction of the acquisition, the dealers who learn from this
are firming up, which suggest good things post-COVID-19 recovery. “I also feel like it’s crisis are the ones who are going to survive,
for the credit markets.” important to keep an eye on what’s possible Schwartz said.
on the downside,” Garcia said.
Information coming out of other countries The crisis has revealed an “amazing” adop-
looks good – in terms of recovery from the Concerns about a permanent solution to the tion of digital tools among retail dealers,
coronavirus and shifts toward more per- virus, a potential second-wave of infections Schwartz said.
sonal transportation – which bodes well for and the effect of the stimulus and unem-
Carvana, he said. ployment benefits, which are more gener- At the start of the crisis, Cox Automotive
ous than normal, muddy any predictions. had about 1,000 Autotrader dealers who
“I think all the information you look at, “I think it’s pretty hard to have a firm view had ‘true digital tools.”
looks incredibly positive,” Garcia said. of what’s coming,” Garcia said. “But all the
signs are pretty optimistic today.” In the wake of the outbreak, the company
Sandy Schwartz, CEO of Cox Automotive, has helped outfit 10,000 dealers with more
agreed that things are looking up. Sandy Schwartz, CEO of Cox Automotive digital tools that they are now using.
Schwartz acknowledged the challenges
“First of all, there is pent-up demand,” he ahead. “The question is going to be, can we “This is something we’ve been talking
said. Dealers are ramping up their inventory sustain (this recovery)?” Schwartz said. about for a while,” Schwartz said. “People
to 70 or 80 percent of their pre-COVID-19 know now that we’re never going back to
numbers in the month of May, to “maybe Two areas will be big factors. Will new- where we were.”
even” matching what they did a year ago. car dealers have the right inventory and will
used-car dealers have “the right inventory at He said there are lot of innovative dealers
Schwartz said encouraging signs are com- the right price,” Schwartz said. On the new- who will adapt to the times – and they have
ing earlier than he thought in the retail car side, inventory will likely be “stretched a to do it.
landscape. little bit,” he said, with some effect from the
factory shutdowns during the coronavirus. “We are not going back to the way things
Doug Ekizian, managing director, PwC were,” Schwartz said.
Consumer Finance Group, said the past Schwartz said the demand won’t be as much of
several weeks have shown a boost in retail an issue as affordability on the used-car side.

6 | MIADA MISSISSIPPI DEALER Q2 2020