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Posted by David Sherman on Thursday, May 14, 2009 at 18:34:07 :
In Reply to: Re: OT : list of 798 Dealers to be closed posted by mannyc on Thursday, May 14, 2009 at 18:02:30 :
I don't have the numbers handy, but there are definitely far fewer Toyota, Nissan, and Volkswagen dealerships than Chrysler, Ford, and GM. The US companies seem to have had the philosophy that since they sell cars wholesale at the same price to everyone, the more salesmen they have out there, the more cars they'll sell. The trouble with that is that the "territory" for any one dealer becomes so small that they can sometimes barely eke out a living or have any money for improving anything. This is the reason that in most businesses, salesmen want exclusive territories. Obviously, the companies have to strike a balance between having good coverage so that anyone who might want to buy their product can easily do so, and making the territories large enough that their dealers can potentially make a lot of money and thus have an incentive to hustle and give good service.
Historically, the foreign companies have gone for larger territories (quality) and the US companies for more dealers (quantity).