Re: Help Me to Understand ...


[Follow Ups] [Post Followup] [Dodge Power Wagon Forum]


Posted by Dan Shockley on Saturday, May 16, 2009 at 02:36:47 :

In Reply to: Help Me to Understand ... posted by Dave Speed on Friday, May 15, 2009 at 22:31:57 :

The issue is that too many dealers, in today's information age, makes for competitive behaviors between dealers and ineffecient distribution. This may seem to be a good thing for the auto companies, but in the end it hurts the brands. Think of it this way, by Dodge dealers competing for every sale within 250 miles they drive down selling prices. Many small dealers means more overhead and less net profit on sales. All this adds up to mean that even the dealers that are making money, are not clearing enough on Gross sales to invest properly to train staff, upgrade dealerships and advertise promotions and products. In the end, the big three have dealer networks that were built to sell cars in the 1900's when most people choose between their local Ford, GM or Chrysler dealer - and now they are on the net searching for the best deal within 250+ miles.

If we compare this to VW, Toyota, and a few other imports that have had great success in the US, they use a smaller number of dealers and are much less likely to offer big discounts. Right or wrong, that is seen as the competitive formula.

Don't get me wrong - it sucks for these dealers - but, in the long run, without drastic action all US brands of yesterday will be owned by someone else, or won't exist - Just look at the UK.

My two cents...

Dan



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