Automotive News [AN, sub] reveals the results of an "unscientific online survey" of "more than 400" U.S. new car dealers. AN paints a predictably bleak picture– for the domestics. "Among dealers who sell Detroit 3 domestic brands, nearly one-third say their dealerships are in the red. The only argument you'll get from a lot of them is whether this is the worst business climate dealers have faced in 20 years, in 35 years — or ever… 'The future is quite bleak,' says a veteran Ford dealer… 'Many dealers are looking for the exit.' But matters are far less dismal for Toyota, Honda and Nissan dealers. Nearly all say their dealerships remain profitable." Reaffirming that [unscientific] result, AN says half of the [participating] Detroit dealers have less staff than last year, while a third of Toyota, Honda and Nissan dealers have added personnel. "And half of the Detroit 3 dealers surveyed said most of the new-vehicle customers they now see are 'upside down,' owing more on their trade-ins than the vehicles are worth." Meanwhile… "Life in Toyota-land is good," says Dan Luneau, owner of Handy Toyota in St. Albans (VT).
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I don’t know how any Buick dealers stay in business (at least the standalone ones). Don’t they average something like 5 cars per month?
Attrition should make thinning domestic dealers ranks easier and cheaper.
Liberty Buick here in the Phoenix area is a standalone Buick dealership and is stocked with clean trade-ins and auction cars. That’s also been the lifeblood of Saturn dealers for years.
Gardiner Westbound: You hit the nail on the head. The real problem here is too many domestic dealers vying for a declining piece of the business. This is not a great scenario and one of the fundamental business model issues for the domestics—-its a huge problem even when we are in economic boom times !
Many of the above sentiments are correct. A cull of domestic dealers is necessary.
And since there’s no more money in the till for Oldsmobile-type bribes payoffs, starvation is a smart strategy.
There can’t be that many Buick-only dealers left, can there? The goal was to make as many of them Pontiac-Buick-GMC combos as possible.
I used to be in the parts department at a Buick-Pontiac-GMC dealership until the beginning of the year. It was down right sad the amount of new Buicks and GMC’s that were catching bad cases of lot rot, having to be washed for the lot 3-4 times each because they just sat there unsold. It was almost like they were nailed to the lot. Now that I have moved to an import brand dealership I realize how horrible domestic sales (and quality) truly are. Domestic brand cheerleaders are not convincing me at all.
the ship is not sinking. it has sunk.