In just the last three days, you would think we were in a different economic world. During my tenure in business, I’ve experienced several economic downturns. Some of them have been more memorable than others. The one thing most of them had in common was some significant event or change that caused the economy to skip a beat or, in some cases, even stop beating.
In 2008-2009, it was the fiscal collapse of the lending community that sent us all reeling and, to some extent, it’s that financial situation that’s causing us problems today with tight lending policies and constraints. Don’t misunderstand me here. If you qualify, money is about as cheap to get as it has ever been during my 35-year career. The trick is qualifying for the credit line. Banks are still attempting to recover from the last lending debacle and are very cautious about who they lend money to. This tight credit supply makes economic growth challenging.
The difference this time is that there seems to be no significant event. The markets just got nervous over the Federal Reserve’s inability to create policies to lead us into financial growth. With the U.S. economy being about two-thirds consumer-based, it takes consumer spending to drive things upward. If the public isn’t spending, we’re not growing.
So, what is the trap I referenced in the headline above? It’s the “me too” syndrome you can get dragged into during times like these. Those of us in the collision industry are blessed with consistent business that’s just going to be there. The U.S. has around 250 million vehicles on the road, and those vehicles travel about 3 trillion miles per year. That all adds up to a certain percentage of vehicles that will be involved in an accident during the year. While that’s bad news for owners, it’s good news for all of us. Regardless of what the economy does, there will be cars that need to be repaired.
In addition to the statistics above, there are vehicles that need repairs other than collision. The average age of those 250 million vehicles is at an all-time high of 11 years. Older vehicles need repairs, both cosmetic and mechanical.
Whatever 2012 brings us economically, there will be repair work for those of us who are out there working to get it. Plan for next year and look for ways to ensure that you get your fair share of that work. Whatever you do, don’t believe the economic forecast is a forecast of what your business can do.
If you’re going to SEMA, be sure to stop by and see us at booth #10814!
