A simple explanation for the fall in car sales?

january-2009-sales-chart

People across the auto world are searching for every possible explanation for why auto sales keep falling. What they all seem to be missing is the one simple reason that connects it all: trust.

Before we get to that, though, let’s look again at the tumbling sales numbers coming from all corners of the globe:

 

Naturally, the auto experts like to blame the economy and the corresponding lack of credit available for potential buyers. I’m not going to downplay that issue, because it’s a serious one that is affecting nearly all of humanity.

The bottom line is this: We have an exaggerated decline in demand. It’s very important to remember, though, that there is indeed still a demand. Most auto companies will pull out of this just fine once they figure out how to adjust their production and get used to current demand levels. To keep this in perspective: GM sold nearly 120,000 vehicles in January. If they can’t survive on numbers like that, there’s something terribly wrong.

It’s no secret that car companies have been spoiled for years, especially by a spend-happy American public. Now that sales numbers are dropping back to Earth, it’s becoming clear that most car companies have a very important business model backwards: People will not buy cars to help a company out. People will buy cars from companies that help them out.

No one is going to head out and buy a Chrysler in hopes theirs is the sale that saves the company. People are going to head out and buy a Hyundai, because that’s the company that will stand behind them if they lose their jobs.

It’s not hard to figure out that is why Hyundai’s sales have increased 14% while others have dropped by at least twice that number.

I don’t get why there is only one carmaker who understands the effectiveness of standing behind a buyer rather than asking for their pity. Humans are never going to feel sorry for a corporation, but they will trust a corporation who promises to be there in tough times.

Gaining trust turns into gaining buyers, and that’s what many carmakers fail to understand.

Which car company do you trust the most right now?

-tgriffith

2 Comments

  1. I think you forget Subaru, whose sales also increased, as did Audi’s. Why? Maybe because Subaru survives in a niche market, and Audi is an affordable gateway into luxury.

  2. I work for one of the best Car Groups in the Country! We’ve set records for Customer Service Scores on both the Sales & Service side of the Business! We operate under the Rydell Group out of Grand Forks,ND. All of our Stores operate like my Saturn store! No haggle/No Hassle!!! Our Very Best Price is always hanging in the Window! We had our best January in 2009 then we’ve had in many years!!! When you treat people right they come back! Look @ the Hecker stores…treat people wrong & they don’t come back!

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