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Chrysler joins Ford and GM in moving to Quarterly Sales Reporting

By Phil Villegas

Last year GM was the first of the major manufacturers to cease reporting sales on a monthly basis and shift to quarterly reporting. Ford followed suit early this year and FCA announced earlier this month to do the same.  Prior to GM making the initial move, the only other mainstream manufacturer to not report monthly but rather quarterly was Tesla. The move essentially allows the manufacturer some latitude in having to explain monthly spikes and/or drops that can be seasonal or tied in with fleet sales, allowing them to gain better control of the message when reporting quarterly.

I agree with the move of getting away from monthly reporting and opting for quarterly, I can only wish this move could trickle its way to dealers moving to quarterly financial reporting.  I believe that similar to manufacturers, for dealers, monthly sales reporting is somewhat of an inefficient and non-representative financial picture of the broader operating environment.  If you look at the actual lifespan of an actual new vehicle sale transaction, from the time the vehicle is ordered, PDI’d, retailed, and all incentives collected, a quarterly picture is far more representative of this environment.

For many dealers, the value of some of their personnel, inventory or their marketing strategy is only as good as their last month’s financial performance.  This approach often leads to impulsive reactions to hiring/terminating personnel, ordering/auctioning inventory or changing advertising campaigns.

Also consider the birth-like process that most accounting departments have to go through every month in producing a dealer financial statement. For most dealerships, the accounting office becomes a hazardous area to approach for the first 10 days of the month in order to produce a financial statement. The primary driver behind this is compliance with the manufacturer deadline for financial statement submission. If GM, Ford and FCA are going to quarterly reporting, can you imagine the benefits this could have on your operations if you could also report quarterly? I have no doubt there would be significant administrative savings if dealers would be allowed to report financials quarterly compared to monthly.  I also believe dealers would benefit from a longer performance outlook window in terms of marketing, inventory and personnel management strategy.

The largest challenge I see would see with quarterly reporting is ensuring the dealership’s vehicle sales management maintains a monthly sales mindset in a quarterly reporting environment.  The greatest benefit of monthly reporting is the short-term sales goal mindset and the tenacity with which it is approached to exceed monthly targets.  I believe this is a process than can be managed and not compromised based on maintaining internal monthly sales objectives and performance bonuses in a quarterly reporting environment.

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