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Car Forum / Ford / Ford Cars / May 2009closing dealers saves money??
I'm curious. How does closing a dealer save an auto manufacturer money? The dealers buy the cars and parts from the maufacturer. If the dealer can't sell them, the it's the dealer that's stuck, isn't he? Even if a dealer only sells one care a month, the manufacture makes a profit on that car. >I'm curious. How does closing a dealer save an auto manufacturer >money? The dealers buy the cars and parts from the maufacturer. If the >dealer can't sell them, the it's the dealer that's stuck, isn't he? > >Even if a dealer only sells one care a month, the manufacture makes a >profit on that car. Not after looking after all the paperwork. There is a cost to the manufacturer just to maintain the files on a dealership. Then there is the "co-op advertizing" costs. And all the training costs (new product awareness and service training, etc - all covered by "corporate" If they are only going to sell 100 cars a month in a geographic area, it costs less to have one dealer do it than 5. On May 16, 4:34 pm, cl...@snyder.on.ca wrote: > If they are only going to sell 100 cars a month in a geographic area, > it costs less to have one dealer do it than 5. And, there is less chance of a customer having two (or three) dealerships compete against each other for the low-ball price. A lot of these dropped dealerships got screwed big time over this. The irony is that Chrysler has been twisting their arms to buy some cars and have them sit on their lots. Now the actual people in charge won't buy their cars back. > On May 16, 4:34 pm, cl...@snyder.on.ca wrote: > [quoted text clipped - 4 lines] > dealerships compete against > each other for the low-ball price. Competition and advertising would be good for Chrysler, not bad for it.Chrysler doesn't care if their cars are sold at the dealers for $13,000 or $20,000, as long as they are sold. > A lot of these dropped dealerships got screwed big time over this. The > irony is that Chrysler > has been twisting their arms to buy some cars and have them sit on > their lots. Now the actual > people in charge won't buy their cars back. The actual people in charge didn't strong arm the dealers. They got stuck with a horrible mess. Of course, it still sucks for the closed dealers. I do feel sorry for them, particularly because minority dealers are particularly hard hit. Jeff >> On May 16, 4:34 pm, cl...@snyder.on.ca wrote: >> [quoted text clipped - 8 lines] >it.Chrysler doesn't care if their cars are sold at the dealers for >$13,000 or $20,000, as long as they are sold. Absolutely not true. If the cars are sold for $13,000 instead of $20,000 it depreciates the brand in the public eye. Deep discounting is to be avoided whenever possible. >> A lot of these dropped dealerships got screwed big time over this. The >> irony is that Chrysler [quoted text clipped - 7 lines] >Of course, it still sucks for the closed dealers. I do feel sorry for >them, particularly because minority dealers are particularly hard hit. Minority? I believe you mean minor - the small guys who really work at surviving. >Jeff On May 17, 10:06 pm, cl...@snyder.on.ca wrote: > >> On May 16, 4:34 pm, cl...@snyder.on.ca wrote: > [quoted text clipped - 28 lines] > Minority? I believe you mean minor - the small guys who really work at > surviving. No, I meant minority, as in not white. Minority dealers tend to sell fewer cars per year and be located inside cities, where they have less space. http://www.npr.org/templates/story/story.php?storyId=104240851 Jeff > >Jeff On May 17, 10:06 pm, cl...@snyder.on.ca wrote: > >> On May 16, 4:34 pm, cl...@snyder.on.ca wrote: > [quoted text clipped - 28 lines] > Minority? I believe you mean minor - the small guys who really work at > surviving. My great-grandfather used to work in the mines underneath Scranton, PA. He was a fire boss. Jeff >>I'm curious. How does closing a dealer save an auto manufacturer >>money? The dealers buy the cars and parts from the maufacturer. If the [quoted text clipped - 10 lines] > If they are only going to sell 100 cars a month in a geographic area, > it costs less to have one dealer do it than 5. A lot of dealers have a floor plan, financed by the factory, or Borg Warner. That costs $$$$$$$$$$! Steve R. > I'm curious. How does closing a dealer save an auto manufacturer > money? The dealers buy the cars and parts from the maufacturer. If the > dealer can't sell them, the it's the dealer that's stuck, isn't he? > > Even if a dealer only sells one care a month, the manufacture makes a > profit on that car. The dealers also have to be supplied with training, contracts, factory representatives, books, brochures, etc. All of this costs money. jeff On May 16, 3:23 pm, Caesar Romano <S...@uce.gov> wrote: >> I'm curious. How does closing a dealer save an auto manufacturer >> money? The dealers buy the cars and parts from the maufacturer. If the [quoted text clipped - 7 lines] > >jeff Small potatoes. The major cost of the training, books, and brochures is the development of them, not the printing costs. Some jackass in the Obama administration has got it in their head that because Toyota has fewer dealers that Chrysler & GM must have fewer as well. With GM, they are closing some brands, so that makes some sense that the standalone dealers are closed (but there aren't that many of them). They are going to find out the hard way that they've whacked too many dealers when they miss all sales targets and have to keep them on bailout lifelines for years. Thank goodness Ford didn't take the government money and isn't forced to close a third or more of their dealer network! Derek >On May 16, 3:23 pm, Caesar Romano <S...@uce.gov> wrote: >>> I'm curious. How does closing a dealer save an auto manufacturer [quoted text clipped - 17 lines] >the hard way that they've whacked too many dealers when they miss all sales >targets and have to keep them on bailout lifelines for years. Paying the instructors, the time spent per dealership adds up. Printing costs are not inconsequential either. You know what it costs to print a book over an inch thick? That's why MOST manuals etc are on CD /DVD today. The printing and warehousing costs for printed manuals are SIGNIFICANT. However, there ARE other things going on - and IF GM survives they will be stronger for it. It's been a LONG time coming. Chrysler is not in as bad shape that way as they lost dealerships when Plymouth was phased out. Didn't happen when GM deep-sixed Oldsmobile. In Canada it happened with Ford when Mercury was dropped. Here in Kitchener-Waterloo we have 3 Chrysler dealers and 3 GM dealers and only 2 ford dealers. 2 Nissan, 2 Toyota, 2 Hyundai,, 1 Kia, one Acura, one Lexus, and one Sube, plus a Saturn/Saab and 2 VW, 1 Porche, 1 BMW, 1 Mini, 2 Mazda, 1 Mitsubishi,. Within 25 miles in each direction Guelph and Cambridge have several of each, Elmira has a Chrysler dealer, Listowel has one of each, Elora and Fergus have a few, New hamburg has one of each of the "big 3", Baden has a GM dealer, They are EVERYWHERE. I think they would be much further ahead with 1 dealer in Waterloo, one in Kitchener, one in Cambridge and ,1 in Guelph and one in Listowel of each major brand. If service availability is a problem, there is nothing stopping a dealership from having a second service department in Elmira, New Hamburg, etc and even having a sales rep in the smaller facility., as an example. Years ago the Waterloo GM dealer had a shop in Elmira (and the Kitchener GM dealer had a shop in waterloo). Waterloo wasPontiac-Buick and Kirchener was Chev-Olds. Kitchener had the Merc dealer and Waterloo had Ford. >Thank goodness Ford didn't take the government money and isn't forced to >close a third or more of their dealer network! > >Derek >>On May 16, 3:23 pm, Caesar Romano <S...@uce.gov> wrote: >>>> I'm curious. How does closing a dealer save an auto manufacturer [quoted text clipped - 22 lines] > > Paying the instructors, the time spent per dealership adds up. Much of the training is done via satellite. > Printing costs are not inconsequential either. You know what it costs > to print a book over an inch thick? That's why MOST manuals etc are on > CD /DVD today. The printing and warehousing costs for printed manuals > are SIGNIFICANT. Like you say, most of the shop manuals are on CD/ DVD. Little cost there either. Derek > On Mon, 18 May 2009 21:06:50 -0400, "Derek Gee" > [quoted text clipped - 33 lines] > Plymouth was phased out. Didn't happen when GM deep-sixed Oldsmobile. > In Canada it happened with Ford when Mercury was dropped. In the US, a lot of dealers had closed before the announcements by GM and Chrysler. They just couldn't make enough money to stay open. GM, Ford and Chrysler were happy to see the number of poorly-performing dealers go down. Jeff > Here in Kitchener-Waterloo we have 3 Chrysler dealers and 3 GM dealers > and only 2 ford dealers. 2 Nissan, 2 Toyota, 2 Hyundai,, 1 Kia, one [quoted text clipped - 21 lines] > > >Derek *Wake up people................. OVER PRODUCTION is the reason for the problems.... * > I'm curious. How does closing a dealer save an auto manufacturer > money? The dealers buy the cars and parts from the maufacturer. If the [quoted text clipped - 3 lines] > profit on that car. > |
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