Chrysler and GM Dealerships

shack

polktiger wrote:

WSJ really should work harder on their articles - Honda and Toyota sell 1200 cars per dealership, sure they have fewer dealers, they also have mass appeal and higher perceived quality. Some dealers are poor car salesmen, but it is also a little easier to sell an Accord or Camry than it is a Sebring.

But isn't that the root cause of Chrysler's problem? Lack of customer appeal? DB did pretty much did them in by not spending anything on R&D and putting out stuff nobody wants. EVEN IF they had vehicles people wanted...they had too many dealerships. Toyota and Honda won't put a dealership in a place where they can't sell lots of cars. The vision of the local dealership in small town America is great "Norman Rockwell" stuff...but it just doesn't work in todays environment.

Something has to change for Chrysler to survive. I think these are good moves (if not drastic enough). What is the saying?:

What is insanity?

Keep doing the same thing but expecting a different result...

I hope Chrysler, Dodge, Jeep, GM, Chevrolet, Buick, Cadillac (and even Saturn) survive. They are (were) great American Auto icons. I don't want them to go the way of Duesenberg, Cord, Auburn, Packard, Studebaker, Pierce-Arrow, Nash, DeSoto, Kaiser, Hudson, Oldsmobile, Plymouth, Pontiac, Willys, AMC and many more... I think Ford may make it...but even they will need to change the way they do business. Let's hope they all learn and survive.

dkg999

H-D might be doing something right that the auto companies should look at. The newer remodeled H-D dealerships I can take my bike in for service, have breakfast/lunch in the diner, shop, set in the lounge and log into work email via wireless, etc. Is it cheap, no. Is it a good customer experience and can I multi-task without taking time off from work, yes.

PhantomOG

GM cuts 1,100 dealers




Even if they weren't in dire straights and being propped up by tax payer money, closing dealerships just makes sense as there are too many.

tonyb

Whats shamefull to me is they took billions of our money to sustain this.Like they didn't know,or could have closed dealerships before asking for bailout cash.The car companies have been in trouble for a long time,and someone gets an idea that makes sense,now?
Unfriggin' believable.

WilliamM2

tonyb wrote: »

Whats shamefull to me is they took billions of our money to sustain this.Like they didn't know,or could have closed dealerships before asking for bailout cash.The car companies have been in trouble for a long time,and someone gets an idea that makes sense,now?
Unfriggin' believable.

Actually, it doesn't make sense. Closing dealers won't really save Chrysler or GM any money.

Hillbilly61

heiney9 wrote: »

The whole point I take from the WSJ article is the fact that Toyota can sell 1200 cars per dealer because there are less dealers...............which is exactly waht GM and Chrysler need to do............reduce the number of dealers. It's ridiculous to have 6 dealers to service a 20 mile radius of a population of less than 500,000. We are losing 3 dealers in our area which I just described. It's sad about the job loss, but something has to be done. We have a Chrysler plant (Belvidere) just 20 miles from here.....we still don't need 6 dealerships for the per capita population.

Guess what there is 1 Toyota dealership in the same area. Hmmmmmm.......

Something I do not understand about this approach is that dealership loss does not affect Chrysler's or GM's overall sales. Think about it. How is the loss of a dealer going to increase the mfgr's sales volumes? That doesn't make me want to buy one of their vehicles any more than if there were 10X the total number of dealers out there.

Fewer dealers of a given brand does make it harder to strike your best bargan when there are fewer dealers competing. In terms of what the dealers pay the mfgr, that doesn't change. I'm missing something here as to how these cut backs are helping the mfgr.

shack

WilliamM2 wrote: »

Actually, it doesn't make sense. Closing dealers won't really save Chrysler or GM any money.

Not directly...but it is all about sales and sales support.

While GM doesn't own the dealers, the company says its network is too big, causing dealers to compete with each other and giving shoppers too much leverage to talk down prices and hurt future sales.

While the targeted dealers represent about 20 percent of GM's total, they make only 7 percent of its sales, the company said.

The cuts will allow the surviving dealers to expand the size of their markets, so they have a better chance of staying healthy and attracting private investment, said Mark LaNeve, GM's North American vice president of sales and marketing.

It does make sense from a business standpoint.

GM and Chrysler do spent money to support thier dealers both directly and indirectly so there could be some cost savings.

WilliamM2

shack wrote: »

Not directly...but it is all about sales and sales support.



It does make sense from a business standpoint.

GM and Chrysler do spent money to support thier dealers both directly and indirectly so there could be some cost savings.

How would it save any money? When my Uncle's send their service technicians or sales people for training, they pay for it, not the manufacturer.

GM and Chrysler both claim it is to insure that the remaining dealers remain profitable, not to save money. My families dealership sells a lot of Jeep's, and they are quite profitable, or were. Now they get nothing back from Chrysler or Pontiac for the franchise's they paid for. Not to mention the cost of putting up two new buildings, and the cost of training their staff to support and service these vehicles.

The nearest Jeep dealer is 50 miles from their location, although they are probably closing that one too, as it's in a much smaller town. I fail to see how this will help sell more Jeeps.

mrbigbluelight

The dealerships that are being closed are having to eat the cars on the lot; no buybacks from the Big Boys.


That's nice.

tonyb

mrbigbluelight wrote: »

The dealerships that are being closed are having to eat the cars on the lot; no buybacks from the Big Boys.


That's nice.

Talk about a stick up the ****.....

sucks2beme

It's all nonsense. The dealers don't cost Detroit anything directly.
But if some guys are cutting margins to sell off inventory, then
the other dealers are going to make noise to the company.
Less dealers mean more profits for who's left.
And Detroit won't have to offer as many incentives to make dealers happy.

Hillbilly61

This is all f*cked up. The dealers must buy the vehicles from the mfgr (often taking out loans to local banks) and make sales figures to keep the franchise. So why cut them free via Chapter 11 or there abouts for the mfgr to make a profit?

Without the coveted franchises many more people will be unemployed. I do not understand this. Someone please shine some light on this?

shack

It's been said here several times. There ARE costs associated with the dealer network both direct and indirect.

The National Auto Dealers Association has launched a campaign against dealer cuts, but auto experts say Chrysler has to look toward the future. As Chrysler cuts ties with dealerships around the country, those dealers are asking why. Experts say it's been coming for a long time.

Professor Robert Wiseman, MSU auto expert: "They are forced into looking into places where they can cut costs as much as possible to become competitive."

Robert Wiseman is a Professor at Michigan State University. He says, by reducing the number of dealerships, they'll save money.

Professor Robert Wiseman: "Well, there's training, there's manuals, there's advertising support. Advertising support is one of the bigger ones."

But more than cutting costs, Wiseman says the driving force behind Chrysler's bloodletting is to make each dealer more powerful and each vehicle more valuable.

Professor Robert Wiseman: "When you have seven Chrysler's dealerships competing with each other in the same metropolitan market, selling the very same vehicle, the only way that they can compete is on price, and when you have just price competition, it tends to reduce the value that people are willing to pay for that."

And although slashing dealers is painful, Wiseman says it is crucial for the brand and the company to survive.

Legion5

i think all the chrystler dealerships in my area are closed.

F1nut

shepx2 wrote: »

Sorry, the numbers do not show it is a myth. It is a fact, and has been for years. Yes, Ford has done better in recent years with their reliability, and they have gotten about even. And the Mustang is one of the few american cars I would consider buying. But regardless of how good the Malibu and Cobalt are, their reliability is just not as good as Honda or Toyota. Go look it up. GM + Chrysler = crappy reliability.

Actually, the numbers show that Buick (GM) and Jaguar (pre-2008 Ford) are tied for 1st place as the most reliable brand of cars according to JD Powers, Toyota was 5th.

F1nut

I forgot to add that Honda was way down the list. So yes, the facts prove it is a myth.

Barefoot

Given it's overseas popularity, Buick needs to be a China entity only. The only thing it does in the U.S. market is strip sales of both Chevy and Cadillac models. Not to mention continue to plague GM with the 'old man' association that it needs to distance itself from to be competitive with European models and to garner sales from the 40 and under crowd (CTS-V and C6 aside).

Chrysler, on the other hand, is just an embarassement. I was actually hoping it would liquidate and die.

shepx2

F1nut wrote: »

Actually, the numbers show that Buick (GM) and Jaguar (pre-2008 Ford) are tied for 1st place as the most reliable brand of cars according to JD Powers, Toyota was 5th.

Lets look at the facts:

(Quoted from JD Power's website)

To provide both auto industry and consumer audiences insights into the long-term reliability of today’s new vehicles, the J.D. Power and Associates 2009 Vehicle Dependability StudySM (VDS) focuses on problems experienced by original owners of three-year-old vehicles (2006 model-year vehicles). The study is used extensively by the world’s auto manufacturers to help design and build better vehicles—which typically retain higher resale values—and by consumers to help make more-informed choices for both new and used vehicles.

So, this study ONLY includes data from the 2006 models. One year. That's it. 1 year (or even 2-3 years) does not make up for all their years of lousy reliability. If you go back through the last 15 years of data, things are quite different.
Now, if you or anyone else wants to base current reliability on one model year, then go right ahead. I, however, need to see more than that. And when I buy a vehicle, I want it to last more than 3 years. I want it to be reliable for 6-10 years in case I choose to keep it that long.

Besides, if I purchased items based solely on what others rated as best, without looking into the data's validity and overall relevance, I'd have a Bose system for my home theater.

Sami

shepx2 wrote: »

And when I buy a vehicle, I want it to last more than 3 years.

Bingo. I too am more concerned about reliability AFTER the manufacturer warranty has expired, not so much during the time they are responsible to fix the problem.

F1nut

Lets look at the facts:

I did look at and present the facts. You haven't presented any.

Furthermore, if a 3 year old Buick has better reliability than Toyota or Honda, then one could reasonably conclude that it will still be better 6 years from now. Why would you think that Toyota or Honda would become more reliable as time passes when they weren't from the get go?

If you go back through the last 15 years of data, things are quite different.

Feel free to post that info, but keep in mind that the premise of the arguement is that American cars are now on par with the imports. Therefore, if data from say 10 years ago shows that the imports were better and we compare that to the current data, it mearly reinforces the fact that American cars are now on par with the imports.

Sami

F1nut wrote: »

one could reasonably conclude that it will still be better 6 years from now.

That would be like concluding that a 100m runner is faster on a mile run than a marathon runner. No, you would have to look at 6 year stats for that. 3 years is way too short of a span to look at brand reliability.

mhardy6647

... 'specially considering that planned obsolescence was (if memory serves) invented by the auto industry.
http://en.wikipedia.org/wiki/Planned_obsolescence

Systems

Here in Montana in my one horse town the Chrysler dealership didn't get the "letter" but the GM dealership did......

Danny Tse

Barefoot wrote: »

Given it's overseas popularity, Buick needs to be a China entity only.

You do realize that the Buicks that are sold in China are not the necessarily the same ones we have in the US, right?

Barefoot

Danny Tse wrote: »

You do realize that the Buicks that are sold in China are not the necessarily the same ones we have in the US, right?

I didn't know that.

http://www.autoblog.com/2006/11/26/chinas-buick-lacrosse-is-cooler-than-ours/

venomclan

We found out last Thursday that my father-in-law's Chrysler dealership is closing. We cannot believe it because this location still does 60 cars/month, and was doing 200/month until the collapse. Apparently it was a political move because it is a corporate store and an opposing dealership had a "friend" on the council.

My father-in-law is devistated. He has been selling Chrysler for 30 years, 12 at this location. He is one of the top 50 salesman in the country and the closing dealership is the top ten of all Chrysler dealerships. This is a huge mess that will not end well.
Venom

Jstas

<script src="http://i.cdn.turner.com/cnn/.element/js/2.0/video/evp/module.js?loc=dom&vid=/video/us/2009/05/18/claxton.cnn&quot; type="text/javascript"></script><noscript>Embedded video from <a href="http://www.cnn.com/video">CNN Video</a></noscript>

kevhed72

If you really want to understand the demise of the Big 3, do some reading on the work of Edward Deming. He pioneered statistical quality control and the management of the Big 3 did did want to hear what he had to say. I believe this was back in the early fifties...check out the following:

http://www.asiaecon.org/index.php/exclusives/ex_read/66

The upper-management of the Big 3 have nobody to blame but them themselves. Funny how you never hear much this...

Jstas

An example of that stellar Toyota reliability.

http://jalopnik.com/5261006/toyota-hybrid-breaks-down-towed-off-track-before-nascar-event

venomclan

Jstas wrote: »

An example of that stellar Toyota reliability.

http://jalopnik.com/5261006/toyota-hybrid-breaks-down-towed-off-track-before-nascar-event

What is the point of this? Do we even dare to post a fraction of the links to big 3 realiability issues? The Polk site would shut down....

New Camaro already recalled due to not starting, even after being late 3 years on it's release...