Too many dealers

Autoblog

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..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]
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Reply to
Dorman
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Simple solution:

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

Reply to
Bob Urz

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.

Reply to
<HLS

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.

Reply to
Steve W.

Interesting site.....their commercials are all over local stations here in the Ozarks, where their are LOTS of small buisnesses.

D

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Reply to
Deke

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.

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His web site has not been totally updated, replace:

with Sukuzi. If you click on the dealership link you get:

This must have been very upsetting for GM!

Reply to
Just Facts

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.

Reply to
Picasso

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?

Reply to
Jim Warman

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

Reply to
Ted Mittelstaedt

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.

Reply to
<HLS

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

Reply to
CyberWolf

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

Reply to
Jeff

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

Reply to
GlassVial

Sure, a few people make out. Most don't.

Reply to
Edwin Pawlowski

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')

Reply to
Bill Putney

Thinking of extended warranties as "insurance policies" makes a lot of sense, but it seems that you apply different rules to these compared to other kinds. If you never have a claim on your homeowner's insurance, do you consider that your premiums were a waste of money and recommend people not buy such insurance?

That being said, however, the only reason we have a 7yr/75Kmile warranty on our '02 300M is that it was a freebie, presumably because Chrysler wanted to unload the '02 models to make way for the '03 models. But in fact ours wasn't one that had been sitting around that they wanted to get rid of: it was built to order because we wanted side air bags and no moon roof or multi-disc CD player.

Perce

Reply to
Percival P. Cassidy

I knew this when I went in to pick up our new Avalon, but ended up buying the Toyota Customer Care insurance anyway. I got it for a little over a grand, and it extends the warranty coverage to 7 years or

70,000 miles ABIR. They gave us a free warranty extension that includes even pinged doors and pecked windshields.

With the price of the new high intensity discharge headlamps, I felt that this might be worth the risk. Time will tell. $1200 is not too much when considering what it costs to fix the newer cars.

I agree that crappo dealerships exist in every brand, just as shitteaux mechanics can work at major dealerships, gas stations, or gooberville garages.

Manufacturers just MIGHT want to weed out excessive dealerships by evaluating complaints from customers and coming down really hard on offending ones. It would be a step toward repairing their credibility, in my eyes at least.

While it is not so easy to do this on independent shops, the coming of the internet, and the efforts of groups like AAA, might still evolve to the point that incompetent or crooked business are shunned out of existence.

Draconian measures? Maybe.. Some people dont seem to understand anything else.

Reply to
<HLS

compared to the cost of the repairs, the home insurance makes a lot more sense than the extended service. Even an expensive repair after 4 years (on new cars is not very likely) is probably less expensive than the service policy, if you have to buy it.

Reply to
BlueD

On Fri, 22 Jun 2007 12:20:28 -0700, BlueD rebooted the Etch-A-Sketch and scribbled:

When I bought my Avalanche in Sepember last year, they asked if I wanted "extended coverage."

The price was $1200. At the time, GM was only offereing 3/36000mi coverage. In other words, I'd be paying $1,200 for two years of coverage.

I declined. Knowing the 5.3L engine and the 4L80/4L60 transmission, I figured they would not go bad before five years. Any other repair would not cost anywhere near $1200. (I put 150K miles on my '95 Jimmy with the

4L60 and never had a slip.)
Reply to
PerfectReign

The vast majority of the time, the dealer and insurance company make out on the insurance. Otherwise, they wouldn't be selling it if they didn't make money.

jeff

Reply to
Jeff

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