Heard Enough Bad News Lately?
The truth behind all of the bad economic news.
The bad news about our economy is everywhere you turn these days. Bailouts, bankruptcies, and foreclosures dominate our headlines. Major retailers are closing hundreds of locations or liquidating altogether. As of this writing, at least one major investment firm had set a target of $0 for GM stock - essentially predicting a shareholder wipeout.
But your business hasn't exactly been thriving lately - right? Keep in mind that our customers are going through quite a shock. They are watching the government bail out U.S. financial companies, which hasn't happened since the 1930s. The media is pummeling them with comparisons between today's economy and the Great Depression. They have just gone through a divisive election, where both candidates constantly reminded them what miserable shape we're in.
Let's take a lesson from that little boy who excitedly dug through the pile of horse manure. ("There must be a pony in here somewhere!") At least some of this bad news deserves a reality check ...
Bad news: This has turned into a global recession.
Reality check: That's true, but not all bad. The U.S. economy led the way to this recession, which drove a "weak dollar" policy from our central bank. That weak dollar had a lot to do with the sharp rise in American oil prices. As other economies have weakened lately, the dollar has strengthened against foreign currencies, and American oil prices have fallen. And as the world's economy slows down, demand for oil falls and gas prices have dropped faster.
Bad news: At least half our customers are worried about their personal financial condition.
Reality check: In fact, a recent Wall Street Journal poll put the number at 56 percent of Americans - and that was before the "credit crisis." Look at it this way: our customers' cars rank right behind their homes in value. They cannot afford to lose this valuable asset, their primary mode of transportation!
Bad news: 2008 auto sales are down more than 20 percent, and 2009 sales are projected to be worse.
Reality check: If you're in the auto repair business, this is obviously good news. This year will be at least a 15-year low for new auto sales. The average vehicle on American roads is now more than 10 years old, for the first time ever!
Bad news: Car loans are being denied to applicants with a 650 credit score.
Reality check: True, and it works for us. Even if your customers want to buy a new car, most of them cannot get a car loan.
Bad news: An estimated 700 U.S. auto dealerships will close in 2008.
Reality check: We all know the answer to this one.
None of us believes the winter of 2008-09 will be easy. This recession could last well into and even beyond 2009. But let's stay focused on the importance of our roles in our customers' daily lives.
And, like that little boy, keep digging.
Editor's Note: This month's Guest Editorial was originally sent to members of ASA-Colorado from its board of directors. It is reproduced for AutoInc.'s nationwide audience.
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