I don't understand this. Dealers are privately owned and operated. They are the manufacturers customers. We in turn are the dealers customers. Why get rid of them. They are not an expense as far as I can tell. What am I missing here?
Will Richmond have a Cadillac dealer after tomorrow?
After the reduction in dealers announced by Chrysler today, and with GM going to announce its' own downsizing of its' dealer network tomorrow, I am wondering if greater Richmond, VA will have a Cadillac dealer. As is stands today we have only two Cadillac dealers for the greater Richmond (1.2 million people). Although I live only minutes from the BMW, Mercedes, Jaguar, Land Rover and Volvo Dealers, I live 15 miles from the closest Cadillac dealer and 35 miles from the only other Cadillac dealer within eighty miles of here. The closest Cadillac dealership has Saab and Hummer collocated with them on the same real estate. There are quite a few Cadillacs in Richmond although come to think of it you don't see a lot of new ones.
Well time will only tell if I have already bought my last new Cadillac!
Well time will only tell if I have already bought my last new Cadillac!
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I have 8 Cadi dealers within 60 miles of my house. My worry is the one I go to for service is a small Chevy-Pontiac-GMC-Cadillac dealer in a very small town. They dont ask any questions about the big shiney intake and they trust me when I come in and tell them whats wrong. They only have 3 full time techs, a service manager/general manager, a parts lady and 1, maybe 2 salemen as far as I can tell. Good group of guys and I hope they make it. There were some GM guys in there a couple months ago when I was there meeting with the manager.
Lets say you sell chicken. Say you sell your chicken to 30 stores, and all those stores are within the same square mile. Suddenly those stores are selling your chicken for 5 cents a piece just to be competitive. You end up having to subsidize this discounted chicken.I don't understand this. Dealers are privately owned and operated. They are the manufacturers customers. We in turn are the dealers customers. Why get rid of them. They are not an expense as far as I can tell. What am I missing here?
Fewer dealers = fewer discounts = higher profit per unit = higher resale
Supply is out of sync with demand.
For the most part they won't save a ton of money. I think the biggest push is to streamline the sales channels to essentially cut the bottom 25% of the dealers out in terms of volume while anticipating that they won't lose that many sales as those sales that would've happened in those dealers will convert to other dealers. I saw one set of numbers I believe on CNNMoney that 50% of the dealers sold 90% of the cars.....and if you looked into it closer I would imagine that a Pareto distribution in which 80% of the sales comes from 20% of the dealers would probably be close. Now that doesn't take into account money from parts and service that the dealers offer, just car sales
They will likely save some money on advertising, training, marketing and probably a decent amount in just the administrative costs of selling a similar volume of automobiles through a much smaller network, but there doesn't seem to be a huge pot of gold waiting them once they get done with this.
They will likely save some money on advertising, training, marketing and probably a decent amount in just the administrative costs of selling a similar volume of automobiles through a much smaller network, but there doesn't seem to be a huge pot of gold waiting them once they get done with this.
To put it simpler, there's a saturation of GM dealers in the country.Supply is out of sync with demand.
There are 139 GM dealers in Minnesota. There are 13 Toyota dealers in MN.
There are way too many GM dealers in MN. There are only 4,000,000 people in Minnesota (rough guess). There are 4,000,000 people living in Los Angeles. Think if there were 139 GM stores in LA!
GM announced last week that they want to close 50 GM stores this year in MN. Now take for example the Chevy dealer I used to work at. It was in the process of being sold from one group to another (Denny Hecker -> Walser), but GM is dragging their heels with the deal because it's too easy for them to close it. It's destiny is uncertain, which means that everyone I used to work with is basically laid off.
Oh yeah, within a 25 mile radius of my house (15 miles south east of St. Paul), there are 17 Chevrolet stores. The vast majority of those are standalone Chevrolet stores, but some are grouped with Cadillac or BPGMC or what have you.
Yea, the market's saturated. :helpless:
There are 3 Cadillac dealers within a 500 mile radious of me and they all suck.
Still doesn't make any sense to me. The guy selling my chickens for 5 cents still has to pay me 20 cents. He'll get thinned out by natural selection and have to close his doors. How can I (GM) have too many outlets for my product? Let them fail on their own. I still don't see where they are costing GM a dime.
there isnt alot of cadillac dealers here in houston and we are huge
No, he doesn't. You just gave him 15 cents to unload it so you can clear out the crap sitting in your factory parking lots. If you keep losing money on each vehicle, you need to raise the value of the car by adjusting the supply to meet demand. Fewer dealers means fewer franchise agreements and fewer lots to fill with product.Still doesn't make any sense to me. The guy selling my chickens for 5 cents still has to pay me 20 cents.
I'm wondering the same thing about Ventura Co. Only two Cadillac dealers in the county, the next closest one is in Sherman Oaks down in the Valley about 30 miles away from me.
There are two Cadillac/Hummer dealers in Nashville and one in Murfreesboro lumped with a Chevy dealer, which is about 30 miles southeast. There is one Benz, one Infiniti, one BMW, and one dealership that sells Audi/Jag/Porshe.
There are four chevy dealerships in Nashville proper, which seems about right to me considering how my area loves fullsize trucks and suvs. What throws it out of whack is that every satellite city in Middle TN also has a Chevy dealership. If you count them, its 14 Chevy dealerships within a 50 mile radius of Nashville. No way in hell is this sustainable, but man it sure did work great when GM had a 60% market share back in the 1960's
There are four chevy dealerships in Nashville proper, which seems about right to me considering how my area loves fullsize trucks and suvs. What throws it out of whack is that every satellite city in Middle TN also has a Chevy dealership. If you count them, its 14 Chevy dealerships within a 50 mile radius of Nashville. No way in hell is this sustainable, but man it sure did work great when GM had a 60% market share back in the 1960's
Underperforming stores also have a negative impact on brand perception for various reasons. The shuttering of the MASSIVE Bill Heard group ("Mr. Big Volume") of dealerships last year is an extreme example of this.
Just got off the phone with the service writers at Fitzgerald Cadillac/VW in Annapolis, MD. They're all sitting around biting their fingernails......the word comes down at noon today........and they're a big dealer with no other Cadillac shop anywhere close.
Between Ford, Chrysler, and GM closing dealerships/shops, the local auto repair businesses must be happy as hell...........
Between Ford, Chrysler, and GM closing dealerships/shops, the local auto repair businesses must be happy as hell...........
I just made an appointment with my dealer yesterday to get my front mount replaced (again) on Monday as my warranty expires on Wed. I hope I still have that appointment by this evening.
I REALLY hope that all of those customer service suveys they have had me fill out over the years have some weight in these decissions.
To Ranger's point, from CNNMoney.com ...
___________________________________________
NADA and various dealership organizations at GM and Chrysler are fighting the cuts, lobbying Congress and hiring bankruptcy attorneys to argue their case. The dealers hope that strong state franchise laws may still protect them, despite the powers granted to the bankruptcy court and the demand for cuts by the Treasury Department.
"While NADA understands the realities of the current marketplace, we also know that dealers didn't cause the situation," the group said Thursday. "Furthermore, we believe that these draconian dealer cuts are not only misguided but counterproductive. Fewer dealers mean less revenue for the automakers. Dealers are the manufacturer's customer; they buy the cars and parts and even the signs in front of their dealerships."
Full story here http://money.cnn.com/2009/05/15/news/companies/gm_dealers/index.htm?postversion=2009051510
GM will ultimately close 40% of the 6,000 dealerships. :nono:
___________________________________________
NADA and various dealership organizations at GM and Chrysler are fighting the cuts, lobbying Congress and hiring bankruptcy attorneys to argue their case. The dealers hope that strong state franchise laws may still protect them, despite the powers granted to the bankruptcy court and the demand for cuts by the Treasury Department.
"While NADA understands the realities of the current marketplace, we also know that dealers didn't cause the situation," the group said Thursday. "Furthermore, we believe that these draconian dealer cuts are not only misguided but counterproductive. Fewer dealers mean less revenue for the automakers. Dealers are the manufacturer's customer; they buy the cars and parts and even the signs in front of their dealerships."
Full story here http://money.cnn.com/2009/05/15/news/companies/gm_dealers/index.htm?postversion=2009051510
GM will ultimately close 40% of the 6,000 dealerships. :nono:
I don't understand this.
Lets say you sell chicken.
Try a bacon analogy, Jesda.Still doesn't make any sense to me.
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