What's up with Dave Smith - Kellogg, ID?

[XDCX]

I just saw a January Sales Report for Chrysler/Jeep/Dodge that showed Dave Smith dropping to second place in the West Business Center and either fourth or fifth for the county overall. They reported 236 sold units for the month - a surprisingly low number based on their history.

In fairness, they had a killer December - 731 units. Maybe they just ran out of inventory?

Are the January results just a one month fluke or are they an indication of what's going to happen for the rest of 2008? Is Dave Smith losing market share in the Northwest?

[SHACOS]

Wow. Growing up in Oregon, I've seen Dave Smith commericals for as long as I can remember. They will even pay for your tickets to fly to Spokane and purchase a vehicle. They are going to be in trouble when Chrysler gets rid of VPA.

[XDCX]

Originally Posted by SHACOS

Wow. Growing up in Oregon, I've seen Dave Smith commericals for as long as I can remember. They will even pay for your tickets to fly to Spokane and purchase a vehicle. They are going to be in trouble when Chrysler gets rid of VPA.

Excellent point - Chrysler killed VPA on 12/31/07.

I've got to admit that I'm biased - I've met Ken Smith on several occasions and had a chance to work with some of his managers - they're really great people and they definitely deserve their success.

That said, VPA may have tilted the field in their favor.

It always used to amuse me how complicated the VPA formula was - in fact, I don't think I ever found anyone who could reliably calculate a dealer's VPA objective from one month to the next. I'll never forget, however, that one of the variables was MSR - Minimum Sales Responsibility.

It seemed like most metro stores could only go so long before they "hit the wall" and their VPA was too high to hit. I don't think the smaller stores with 1,000%+ MSRs ever had this problem.

Granted that one month does not signal a trend, but it will be interesting to see how Dave Smith does the rest of this year.

[XDCX]

I was watching a news report over the weekend where they indicated that I-90 has been closed for several days due to the excessive snowfall and the threats of avalanche. In fact, they mentioned that it was the first time in recent memory that all three Washington Passes were closed at the same time.

I wonder how much of an impact that has on Dave Smith's sales?

I know that a lot of the Dave Smith customers come from Western Washington. Even if they flew into Spokane, they would still have the hassle of trying to get their new car/truck through the Pass.

It will be interesting to see February's sales results.

[XDCX]

As I've stated before, you cannot draw any conclusions based on a one month sales report. With February quickly coming to a close we'll know have a better indication of what's happening in the market in nine days.

That said, it's interesting to note that Lithia's Management Team indicated that they felt the market was in a recession and that their floor traffic was down "measurably" in the Fourth Quarter. Lithia had their Conference Call yesterday and reported disappointing results.

Any input on how February's shaping up?

[XDCX]

Originally Posted by XDCX

As I've stated before, you cannot draw any conclusions based on a one month sales report. With February quickly coming to a close we'll know have a better indication of what's happening in the market in nine days.

That said, it's interesting to note that Lithia's Management Team indicated that they felt the market was in a recession and that their floor traffic was down "measurably" in the Fourth Quarter. Lithia had their Conference Call yesterday and reported disappointing results.

Any input on how February's shaping up?

In response to the question about February - the answer appears to be that it was very soft.

The headlines indicated that Chrysler was down 14% in February but there was no way to determine if that was due to retail demand or fleet sales.

Dave Smith regained their #1 Ranking in the West Business Center with 368 sales but finished #2 in the Nation.

To me, the biggest surprise was the performance of some of the C/J/D stores in the Portland Area. Some stores that used to sell 60 - 80/month reported less than 20 units in February.

Hopefully, March will be a better month - time will tell.