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Happy Holidays!

A Prosperous 2015…But What Awaits Us In 2016?

 

Another year is almost behind us and we were fortunate enough to reach out to you every month with our Newsletter in 2015. There is a mix bag of opinions regarding auto retail business in 2016. Some believe that interest rate increase is not going to impact car sales. But if we approach it from a conventional perspective and look at the history, there is very little reason to believe that things will be different this time. Let’s take a look:

 

 

1- Interest rate hikes are driven by growing economy and to control inflation. If it is going to control inflation, it will have some impact on car sales and it always has.
2- Cyclical change in sales has been anywhere from 7 to 9 years between the highs and lows. It is usually driven by interest rates, world’s political climate, and general elections, not to mention the gas prices.
3- 2016 is an election year and there are a lot of uncertainties regarding the terrorist activities and overall world peace.
4- Oil prices being at record lows usually would boost car sales. However this time around it has started to effect oil related investment to slow down which will impact overall economy and therefore car sales as well.

 

How Big Can The Bubble Grow Before…

 

I don’t mean to sound negative but after breaking the sales record this year with over 17MM car sales in the US, all of the above leads me to believe that 2016 might be down instead of being flat. The point is, everything we talked about throughout the year all had to do with efficient operations, controlled expenses, maximized margins and solid processes. I have over the years also seen some retailers actually flourish in down times by simply being prepared and thinking outside the box.

 

Here We Grow…

 

I am also proud to announce that our company Convergent Alliance will be 10 years old in January 2016. We have been fortunate enough to work with over 135 retail stores across several states and at some level have contributed to improving their processes, expense structure, organizational culture and their