Small Business Marketing News Update - Auto Salvage Industry Hit By Lack Of Rain And Clunkers

With the lack of rain and the implementation of the Cash-for-Clunkers program, inventory for the auto salvage industry is down substantially, according to Bob Eubanks, president and owner of Rusty AcresInc., of one of the most successful auto reclamation centers in Florida.

Eubanks, whose business serves the Northeast Florida and Southeast Georgia markets, says the industry has been hit by two major issues. First, the federal government’s Cash-for-Clunkers program diminished a natural and large source (over 690,000 running vehicles) of late model vehicles that would normally be picked and sold as salvage. “The clunkers were taken off the market and the engines were filled with a substance like cement, “ Eubanks explained. “So each vehicle was worthless as far as salvage.”

Another side effect of removing the clunkers is the shortage of used vehicles at auto dealerships. With the economy as sluggish as it is, used vehicles are more popular than ever. But with the shortage, the price of used cars has increased, defeating the main motivation for people buying used.

The second hit to the industry has been the lack of rain, not only in North Florida but also around the South. “If it doesn’t rain, you don’t have as many auto accidents,” Eubanks said. “Not that wrecks are good, but it does help supply the salvage industry.”

Rain was minimal in North Florida and South Georgia during the first half of the year, which affected the local market. But Eubanks’ operation utilizes a national network system, where he can locate and deliver parts anywhere throughout the country, including the Southeast. So with a major drought in Texas, his business was also affected by the lack of rain in that market.

“We have been doing a very brisk business in our industry, even during the recession,” Eubanks explained. “But we would be doing even better if we had the inventory.”

In addition to owning Rusty Acres, Eubanks is also the past president of the Florida Auto Dismantlers And Recyclers Association (FADRA).

Kindly Bookmark and Share it:

No comments:

Post a Comment

Designed By An Insurance | Proudly Powered by Blogger