Pub 2 2020 Issue 1

The auto industry recently experienced unprecedented change in the span of a few months due to the coronavirus pandemic. The impact has been felt by OEMs, dealers, and their customers. Although online sales are commonplace for purchasing certain consumer goods, even groceries, vehicle transactions have historically not kept pace with other digitally retailed goods. Visits to dealership showrooms to consummate deals remains the norm. This is partially due to the need for original, or “wet”, signatures being required for certain documents that comprise the entire vehicle sales transaction (e.g., title, odometer, secure POA, tax forms).

The LIFO (last-in, first-out) accounting method for inventory valuation is one of the few business tax deferrals permitted by the IRS. Intended to benefit businesses through times of economic inflation, LIFO allows companies to include the effect of inflation in their cost of goods sold, thus lowering their taxable income.

While retail looks different than it did just a few months ago, people are still shopping. Customers and businesses alike are adjusting to our new environment, with online orders for everything, no-contact pickups, and limited face-to-face interaction.

What are your thoughts about the auto industry and COVID-19?
I’ve been in the industry for the lion’s share of my career. No one has seen anything like COVID-19 before. It has been an unforeseeably trying time and has changed us in a way that I think is forever.

A look at the raw sales numbers for the first half of the year might be enough to discourage almost anyone in the business of selling cars and trucks, but there are signs things are changing for the better and that means opportunity. That opportunity is knocking on the used car side of the business, but it will only pay off if managed correctly.

A well-worn cliché says there are only two things you can be certain about: death and taxes. With apologies to those who agree with that statement, there are many, many more examples of out-and-out certainties. Was Sunday followed by Monday last week? Absolutely. Will that be the case next week? You can count on it.

While exponential change is always moving, businesses and even whole industries traditionally move slower than they should, often finding themselves disrupted and working hard at being agile alone. During the Coronavirus pandemic, all industries were disrupted in one way or another, many having to close their doors for the time being and forfeit growth and profits they make from in-person customers.

If you feel the same way we do, you want to retire the word “unprecedented” and all the unexpected events of 2020. The year 2021 may still give us more opportunities to deal with unpleasant realities, but at the end of 2020, we are doing our best to find a new normal that keeps us safe from the coronavirus pandemic. Our dealerships are open and selling, online and in person, and we are taking every opportunity we have to provide for our families and strengthen our communities.