Just because the Japanese manufacturers have fewer dealerships and sell
an equivalent (or greater total number of vehicles) as USA brands does
NOT, repeat NOT really mean anything. It is also easy to misinterpret
these things, especially in light of what Toyota is doing.
Seems the average Toyota dealership sells about 1300 vehicles/ year,
whereas the average Ford dealership does way less. So, comon sense
might dictate that if Ford closes smaller stores, then the average Fords
sold per dealership would increase--at least that's what the all-knowing
consultants purport would happen. But it really does not happen that
In the case of GM and Chrysler Group, they have done some consolidations
which have resulted in fewer sales points, but sales points with more
product lines in each place. So using them as a poster child for these
things is not completely appropriate.
In the case of Ford, very few Ford dealers also sell Lincoln-Mercury
vehicles, especially in the larger metro areas (where only dealerships
with the highest CSI ratings can have all of the lines in one location).
But, what is historically unique about Ford is that they had dealerships
in pretty much every smaller town in the USA, where the dealers also
used to sell Ford tractors and implements . . . at the same location.
That's how Ford got so ingrained in the DNA of rural America and is
still stronger in those areas, especially in truck sales. Chevy dealers
were more "city slickers" by comparison, plus some of the mechanical
differences between Fords and Chevy pickups (in the '50s era and prior)
made Fords and GMCs the "serious" trucks and the Chevy 1/2 tons more
light-duty in nature.
It also seems that Toyota has been held up as being the gold standard of
how to do things, by the all-knowing consultants, yet GM and Ford seem
to not be treated so nicely.
So, what is Toyota doing now? Well, rather than more sales points per
se, they want existing larger dealers to expand their physical plants
for greater future sales/service/parts business. But, what they are
also doing is letting some "satellite dealerships" be set up in the
non-metro areas (adjacent to metro areas). Therefore, as the domestic
makers vacate those sales areas, Toyota moves into them. Just as when
the domestic makes vacate a niche of the total vehicle product line,
Toyota and others seem to have a vehicle to fit right in that hole.
When GM discontinued many of their 2-dr coupes, suddenly we have Toyota
Solara coupe and convertible. When Camaro and Firebird went away,
suddenly there was the Mitsu Eclipse coupe and conv to capture the fancy
of young and upcoming car buyers. See the pattern???
Now, one other reason the decreased number of import dealerships is bad
is related to repairs. Fewer dealerships in a large metro area, or
especially out in the boondocks, means that if a part to repair the
vehicle is not in stock locally, the dealer can either order it in (days
or weeks????) or dispatch a parts truck to get it from another dealer,
possibly a 3 hour round trip in favorable traffic conditions--just to
repair ONE car. This is something that no consultant has addressed or
admitted to. Nor the number of times/week the particular dealership
will get parts shippments of special order parts or parts for stock from
the stocking warehouses.
Now, I understand that Toyotas "don't break", but if they didn't, how
are the dealerships going to support their expanded service and parts
areas? From oil changes and tire rotations? Don't think so.
An observed problem is too many "consultants" (some with
important-sounding names!) trying to tell USA vehicle manufacturers how
to run their business. In some cases, they've needed some input, but in
others, the input has been defective or ill-conceived or pushes a
particular agenda of some whiz-bang (alleged) guru.
Many of these consultants don't know why GM might have so many vehicles
at similar price points, claiming they could slash the numbers of these
vehicles and "save money". Problem is that each of those vehicles is
there to service a particular customer demographic rather than a price
point situation. It's also called "MORE CHOICE" for the consumer.
What these people do not understand is that somebody that would purchase
a Chevy Impala (for example) would not purchase a Pontiac Grand Prix or
Buick LaCrosse for the same money as they like the Chevy best. Same
with the Pontiac or Buick.
Similarly, there were reports that when DC discontinued Plymouth, loyal
Plymouth minivan customers wanted another one. They were offered a
Chrysler-branded vehicle like the one they had, at the same price as the
prior Plymouth was, but the customers turned their noses up at the
Chrysler as "too expensive, I want a Plymouth", so they went elsewhere
or considered a Dodge . . . or looked at an import for the first time .
. or found a good used Plymouth instead. Then, surprisingly, the next
year's sales figures decreased by about the same number of prior year
Plymouth sales. Nobody really seemed to understand why that was!
Same with Oldsmobile. GM sales decreased by the same amount as prior
year Olds sales. Even with incentives to buy a different GM make! Not
every manufacturer can lose 250K sales/year, not even GM or Chrysler
Group . . . but some analysts/consultants told them they needed to
delete those brands so they could make more money (from lower overhead)
and allegedly constant total sales numbers.
And then there's the deal of all of the GM and Ford plant closings.
Each factory worker was eligible to purchase about 2 new vehicles/year
at factory cost, so many did, later selling them for a little profit on
the private-seller market. Understandably, if you make them mad by
closing the plants they worked at, they aren't very likely to buy more
of that manufacturer's products in the future. A potential 500K
units/year lost???? So, all in all, that might amount to 1million
vehicles/year lost from USA brand sales. Who kept telling them they
should be cutting back rather than fix advertising and product issues??
Consultants that make money from their "informed" advice, both in the
private sector and on Wall Street.
On the surface the "cut back" orientation might make sense, but when you
consider the dynamics of how it all lays out, in the long term (when
most people now look at things in the short term!), the manufacturers
end up with less product choices and less numbers of product being sold.
And, the downward spiral starts and gains momentum exponentially.
In reality, there will be "X" number of new vehicles sold each year,
whether they are mostly domestic or foreign brands. The total
population is growing, too, typically. Having choice is good for the
consumer ("A vehicle for every purse" works now just as it did in the
prior century!). As domestic choices decrease, import brand choices
INCREASE . . . even Toyotas and Nissans and Honda cars. And the same
will be true as USA brands are told to decrease the number of their
dealerships in the USA, too!!!