Too many dealers

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Autoblog http://snipr.com/1ndp3
..General Motors, Ford and Chrysler have far too many retail outlets relative to the number of vehicles they sell. A new study by CNW
Marketing Research has now tried to quantify the dollar cost of that excess and come up with $3.9 billion, or $436 per vehicle. The three US carmakers have 15,741 dealers between them, while the Japanese carmakers have less than 4,000.
Domestic dealers, on average, sell less than half as many vehicles per store annually than a Japanese brand dealer, and most sell far less than that. The extra cost comes from items like having to deliver vehicles to so many outlets, advertising support for dealers and the administrative costs associated supporting them all. For years, the domestics have been trying to find a way to reduce their dealer counts, but state franchise laws make it almost impossible for the carmakers to get rid of dealers until they want out themselves. Unfortunately, the Starbucks model of a coffee shop on every corner just doesn't work for car retailing.
[Source: Detroit Free Press] http://snipr.com/1ndp5
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Dorman wrote:

Let wall mart sell cars and let them sell all brands. The guys that change your oil can change your broken trannie! ;) Its the rural dealer which will suffer under those conditions.
Bob
-
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At first glance, I would have agreed with you, but on second, some of these rural dealers sell a ton of cars and have rather low real estate and employee expenses.
That there is a problem is clear. How to solve it, if it CAN be solved, is not so clear.
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snipped-for-privacy@nospam.nix wrote:

Wal~Mart DOES sell cars, and houses and vacation trips. You just need to find the testing stores they are using. They were even looking into starting a banking section as well but the Feds stopped it.
--
Steve W.
Near Cooperstown, New York
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Some of these rural dealers have high costs..... We are in a "bit" of a boom.... A starter home will cost you 250K+.... full time help at McDonalds pays $12 per hour... my 19 year old son is getting over $20/hour running a wireline truck in the oil patch....
FWIW... does anyone here want "cheap" techs working on their cars? We are after "the best of the best"... and it costs money.... serious money....
Do you want the "bargain plan" brain surgeon.... or the brain surgeon everyone else is waiting for?

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Some of the sorriest excuses for mechanics that I have ever seen have worked for the big city dealership shops. One is more likely, in my experience, to be deeply screwed over in the big shops than in the little rural dealerships.
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Interesting site.....their commercials are all over local stations here in the Ozarks, where their are LOTS of small buisnesses.
D http://www.wakeupwalmart.com /
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A local Vancouver, BC very successful businessman Jim Pattison, who has over 50 businesses and got his start with GM dealerships, recognizes this problem. He just put the last nail in the coffin for his GM dealerships.
The end of April he closed his last GM dealership and is now stocking up his Sukuzi dealership in that prime location.
His auto group now sells cars from several manufacturers, only his one Chrysler dealership being of the big 3. http://www.jimpattison.com/automotive/auto_group/default.htm
His web site has not been totally updated, replace:

If you click on the dealership link you get:

This must have been very upsetting for GM!
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Dorman wrote:

I agree with that, i live in a city of 50,000, there are two ford dealers, two chrysler dealers, and two chev dealers. Only one toyota, one honda, on hyundai etc dealers. (all the rest have only 1)
I never could figure it out. Then if you drive 15 minutes south, you have one more ford, one more chev, one more chrysler -- no more other major brands, and 1hr north you have 2 more ford, 2 more chev, 1 dodge (truck / farm country here) and only a honda, toyota, volvo (Same dealer as the ford).
rediculous.
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Lets see. So if you take your Toyota to the 1 Toyota dealer and he pisses you off by overcharging you, then what? Seems to me your screwed.
Ted
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Exactly! I had my vehicle serviced at 4 different Ford dealerships. One time, I had an electrical problem with my vehicle and one dealership could not diagnose it. They did not charge me for the service. So, I went to another dealership for the same problem and that other dealership was able to diagnose it and repaired the problem. They only charged me for the repairs under my Extended Service Plan. The reason why I had my vehicles serviced at different dealerships is because I had to make sure I don't get screwed over my Extended Service Plan.
Some Ford dealerships would screw you claiming that they would not honor your Extended Service Plan because you purchased your vehicle from another dealership. That is what I call hogwash. According to the Ford Motor Company, the Extended Service Plan is honored at ALL Ford, Lincoln and Mercury dealerships.
Many people has to travel 50 to 100 miles from home to purchase or service their foreign vehicles when there's only 1 foreign vehicles dealership in a certain town or city. If one city has only 1 Toyota, 1 Honda, 1 Volvo, 1, BMW and 1 Mercedes dealership and their service departments cannot diagnose the problem on your vehicle, what do you do? It looks like you're screwed and you would have to travel between to the next nearest city to get your vehicle serviced.
~CyberWolf
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CyberWolf wrote:

Instead of purchasing insurance (Extended Service Plan; ESP) for repairs on my vehicle, I just kept the money in my bank account. That's what the dealers do with most of the money they get when the sell the insurance. And I can take my car wherever I want for repairs. The total number of repairs I would have had I wasted my money on the insurance: $0. The other thing is that there are often recalls and campaigns that Ford and other makers have for problem parts. If there is such a campaign, the dealer is going to say that the insurance plan covered it, when in reality, that's not true.
The ESP and other insurance plans are mostly a waste of money. And what happens if you sell your car? You lose the money? What happens if you sell your car to auto insurance company after it is wrecked? Ditto.
The ESP and other insurance plans are quick buck for the auto companies.
Jeff

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We're starting to get off the original topic here, but the above is not always true. My friend bought the extended warranty on his truck, and it's paid for itself at this point. Not "many times over" but it has, and then some.
-GV
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Sure, a few people make out. Most don't.
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Edwin Pawlowski wrote:

For sure if you are a competent DIY'er and have an aversion to dealers, I'd say the odds are against it paying off financially and emotionally. Obviously, statistically, the company has to make a profit or go out of business. Extended warranties are important only against worrying about major expense failures (tranny, engine, etc.)
Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')
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have you had to buy a power steering pump or ac compressor lately? the ac compressor runs about 350 to 500 dollars depending on brand of car but that extended warranty may cover depending on which one you get. a a/c compressor is not a engine or trans but makes the service contract worth the money spent on it because they also cover r134, seals and reciever-dryer were if you did not have coverage it would come out of your own pocket. which makes a a/c repair a major expense nowadays even a power steering pump is not a cheap fix and if you drive a chrysler product you will end up needing a compressor and evap coil just hope it fails before a 100k Bill Putney wrote:

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philthy wrote:

I agree that those repairs are expensive, but I still - were one of those problems to occur - would be money ahead without having spent the money for the extended policy. Average the cost and the risks over several cars over the years, and you would average out money ahead without the extended coverage. If not, the companies would not be able to stay in business.
Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')
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i picked a repair that i know is a common issue on dc vehicles just like the rack and pinions failing along with p/s pumps and wheel bearings that have a high failure rate the cost of the service contract (not insurance )is justified . also you can count on the hourly labor rate to go up every 3 months or so
Bill Putney wrote:

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philthy wrote:

Which is one of the reasons I do my own work whenever possible.
I happen to have a '99 Concorde with a bad evaporator now, and I still have no regrets not having extended coverage.
Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')
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really ? wait till you pull that dash or pay the repair bill
Bill Putney wrote:

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