Dealerships control costs to prepare for down cycle

Economic or political shocks, such as the recent attack on Saudi Arabia’s oil infrastructure and ongoing tensions between China and Hong Kong, could change dealers’ reality quickly, he added.

“Barring any kind of a shock, I think it’s a gradual glide path to wherever we’re headed,” Kenningham said. “The things that worry us the most are the shocks.”

Penske Automotive Group President Robert Kurnick described the worst month of his life as November 2008, when the nation’s second-largest new-vehicle retailer had to cut 10 percent of its work force.

“I never want to go back there,” he said. “I think the lesson that we learned was being lean, to anticipate a downturn,” adding that it’s important to be profitable no matter the economic cycle.

Kurnick described today’s sales market as “pretty good,” with Penske continuing to have a strong service business even with pressure on gross margins.

Great Recession lessons also came rushing back to Tammy Darvish, president of U.S. operations for AutoCanada and its nine-store Leader Automotive Group.

The former executive at her family’s DARCARS Automotive Group in Bethesda, Md., walked into what she described as a “very challenged” business when she took over the former Grossinger Auto Group stores in Illinois this year. She knew she had to get busy cutting costs.

Some of her first moves included renegotiating vendor contracts and tapping employee training, such as from finance and insurance provider JM&A Group, which helped the company with compliance, Darvish said.

She added, “I had such an inner drive to figure it out and make it work.”

Melissa Burden contributed to this report.

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