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Aaron Jacoby, the head of Venable's Automotive Practice Group and a partner based in Los Angeles, was interviewed by The AmLaw Daily about the squeeze felt nationwide by auto dealerships due to poor sales and the credit crisis.

In the interview, Jacoby outlined the current problems facing dealerships and the effect declining automotive sales will have across the economy. "This is a once-in-a-lifetime event where there will be a significant shakeout," he said. "There's going to be a combination of consolidation and a winnowing of the dealership ranks of every brand. Many are just looking for ways to survive the next 18-24 months and a lot of others are just closing their doors."

Jacoby foresees gloomy times for automakers. He recommends all dealerships perform a detailed business analysis and carefully examine policies and procedures to identify opportunities to cut costs and reduce allocations for vehicles. These budget-reduction maneuvers will have a far-reaching impact beyond the automotive business, according to Jacoby. "Auto retail sales are the largest sales tax provider in many states, especially here in California. In many states the auto industry is among the largest employers and there are going to be a ton of layoffs," he said.

"The auto industry also supports many other industries," he said. "Besides parts and office suppliers, you'll see many media enterprises feeling the effects. Auto advertising is a reliable revenue stream for newspapers, radio, and TV, and I think you'll see a big drop in that kind of advertising."