A faint silver lining in the dark clouds brewing over Chrysler and GM dealers who have received “Dear John” letters: Volkswagen’s sales chief, Christian Klingler, said he will try to turn many into Volkswagen dealers, Automobilwoche [sub] reports. With a market share of 2.1 percent for VeeDub in the US, unbridled growth would be practically assured. Meanwhile at home, Klingler expects 2009 to become “the best new car sales year since 1999.” The cash4clunkers Abwrackprämie is bringing Germany record sales. Klingler and other analysts believe that 2009 will end with more that 3.5 million cars sold. Looking at the fact that nearly 1.6 million applications for Abwrackprämien money have been filed already, and that nearly half of the applicants never had bought a new car before, the number could reach 4 million.
Given VW’s already shaky sales and service reputation, I don’t think what they need is to take on dealers that were rejected as not being good enough to sell Chryslers.
When one door closes, another opens. I think this is a good opportunity for VW (and some other brands concentrated in metro areas – Subaru?)to expand into the countryside a bit. I suspect there are lots of holes in VW’s dealer map, which to me is more important for factory service than sales.
I know my area could use a VW dealer – the closest to me is 50 miles away, and the outer northeast Atlanta metro area (Gwinnett/Hall/Jackson) could really use a VW dealer.
I have to believe that there is more to the closing list than “bad” dealers. A Chrysler dealer in the small town of Cleveland GA was shut while another mediocre dealer in the area remains. The difference (AFAICT): the other dealer has multiple locations. A family friend that is a good long-time Pontiac/Cadillac dealer fully expects to lose Caddy because he will not kick his bread&butter Honda franchise to the curb, and will/can not expend the funds for a new building to separate the showrooms.
Hmmmmmmmmmmmmm…… Gallup, NM (Where I live.) City of 20,000 on I-40.
In Gallup, Ford, Lincoln, Mercury: Buick, GMC, Pontiac: Chevrolet, Cadillac: Chrysler, Dodge: (Fiatsler dealer escaped the ax, GM won’t tell anybody anything.) Nissan, Toyota, Hyundai.
ANY OTHER MAKE OR MANUFACTURER = 130+ miles away. Yet you still see Honda, Suzuki, Kia, Subaru, VW ect owned by people around here. Soooooooooo if one of our GM dealers gets the ax, I see opportunity here.
This is probably not good news. VW needs a dealer network that is responsive to customers, and understands how to sell sometimes quirky European automobiles. Unless, that is, they immediately want to go down market (giant inflato gorillas in front of dealerships, loud, tacky radio/TV commercials, etc.). THEN it’s a no brainer.
EEGeek can’t blame your friend Who in the hell would choose a Cadillac over Honda if forced to choose one business. GM probably won’t survive this recesses ion government bailout bucks notwithstanding.
I’m curious though so Honda didn’t mind your friends Honda dealership sharing a showroom with GM?
My nearest Chrysler dealer got the axe. This is a perfect oppo… oh wait, that dealer already sells VW. and Audi, Volvo, Subaru, and Hyundai.
maybe they only have 2.6% market share because of their reliability and super high repair bills… but now the reject Chrysler/GM dealers probably will dream up the market share to 50% (like GM still has :-)
The highly paid city folks didn’t mind paying a repair bill of $ 2,000 for the dumb VW mechanic to take 3 days to figure out which $ 20 piece to replace. I’m sure the folks in the country side with smaller income (or actually have to work for the money) will get a heart attack after the first out-of-warranty shop visit.
I guess for the dealer it is better than nothing if it wasn’t for investing so damn much money for a niche product that has a completely different costumer base than Chrysler/GM. New tools, updating showroom, retraining staff… and then try to sell a Beetle to the former Hummer driver. Good Luck!
Sherman,
I bet Honda loves sharing a dealership with GM — they must sell a lot oc Civics, just by parking them next to Cobalts.
Actually, I can see where this could be something wonderful for VW.
The two Dodge dealers that I personally knew and dealt with in the past back in PA, both of whom lost their franchises, would be excellent dealers for any franchise once they got to the point of believing in what they sold. (Yeah, they were that old fashioned – they actually cared about what they sold.)
I can see excellent opportunities for a lot of the smaller players in the industry, as not all the dealers who lost their franchises were the ones we really hoped would go away. No doubt, too few of those got dumped, and too many small good dealers were.
Some of the dealers which got the ax were well run businesses with good local reputations. Not all, but some.
Our US centric readers may not be aware that VW is now neck and neck with Toyota for global sales leadership.
It is fascinating how several German car companies are doing relatively well on the world stage when their home market is a tiny 3 million unit per year blip. US annual vehicles sales rates have dropped twice that much in recent times.
It is worth asking: How is it that manufacturers with a small local market, high costs, generous vacation policies, agressive labor unions and that oh-so-evil universal healthcare have been able to prosper on the global stage?
“It is worth asking: How is it that manufacturers with a small local market, high costs, generous vacation policies, agressive labor unions and that oh-so-evil universal healthcare have been able to prosper on the global stage?”
They make desirable cars, with high percieved quality.
How is it that manufacturers with a small local market, high costs, generous vacation policies, agressive labor unions and that oh-so-evil universal healthcare have been able to prosper on the global stage?
VW makes a lot (most?) of their cars in Mexico and Brazil.
John Horner: Our US centric readers may not be aware that VW is now neck and neck with Toyota…
But six laps behind Peugeot. :-)
How is it that manufacturers with a small local market, high costs, generous vacation policies, agressive labor unions and that oh-so-evil universal healthcare have been able to prosper on the global stage?
You mean like Saab and Volvo? Fiat’s prosperity on the global scale remains to be seen. As for Germany, Daimler’s muddled management shows that company management is still probably the determining factor in company success.
In any case, as the great philosopher P.J. O’Rourke pointed out, socialism works when socialist countries are rich, i.e. they have successful business enterprises that create wealth that the welfare state can tax.
In any case, my daughter and my ex are both UAW members and I don’t think they’d trade their health benefits for a government run health plan (but then they both work for Blue Cross).
If VW wants to become the next Fiat in the US, go ahead and take over those defunct dealerships. It’s not like people don’t know where to go to buy a VW.
This is probably not good news. VW needs a dealer network that is responsive to customers, and understands how to sell sometimes quirky European automobiles.
Which is everything VW’s extant US dealership ain’t.
Having a strong dealer network can’t be overlooked. If you want to keep your consumers happy then you will need to be able to support the them when they come back for service. When it comes to warranties- consumers should be able to take their vehicle in right away. Having a dealership in their vicinity can help consumers get repairs completed in a timely manner.