Dumb question about dealer closings

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84
Location
Indiana
How is Chrysler and GM closing dealers affecting anybody else but the dealers? How is corprate benefiting if all dealers are independently owned?
 
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16,182
Location
Silicon Valley
If you plan to go to the dealer for warranty services, then you are out of luck. If you are looking for parts then it is harder to find. Dealer is also a service provider that most car buyers consider when they shop for a vehicle.
 
Messages
11,460
Location
Illinois
There is a support structure for dealers. So fewer dealers means a smaller support structure. That's one cost savings. The second will ultimately be higher prices for the vehicles as fewer dealers are fighting over the pool of customers. I think a lot of it is to get down to a number of dealers comparable with Toyota. I think Toyota had about 1/2 the dealers of any domestic car maker, but last year actually sold more cars than Ford, GM or Chrysler. (Not that Toyota is making money this year, but they were bailing money until the last 6 to 9 months when the domestics were all turning losses or microscopic profits.)
 
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39,810
Location
Great Lakes
 Originally Posted By: LT4 Vette
With less Chrysler and GM dealerships, does this mean customers will see more expensive labor/parts at the remaining dealerships ?
Probably not by much, if at all. I mean, they still have all other makes to compete with, so they can't just go crazy on the prices. The benefit (at least in theory) for the corporation as a whole is that the remaining dealers will now get more business, and that will make them stronger financially, better able to serve the customer. Stronger/better dealers help sell the product. There are a lot of people out there that like the product, but don't like the dealer network, so they don't buy it.
 
Messages
439
Location
USA
The domestic car companies are reducing their dealerships to accommodate their market share, which has been reduced by the foreign competition. It will mean that automobile prices will continue their upward spiral, and the cost per hour for service will increase. The good news, is that small independent shops will get more business. The dealers may lose their franchise, but their business may continue as independent dealers, and they can survive on the used car market, and may become certified to work on specific manufacturer vehicles. ...(political content deleted)
 
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Messages
2,759
Location
CarMax
 Originally Posted By: marshall25
How is Chrysler and GM closing dealers affecting anybody else but the dealers? How is corprate benefiting if all dealers are independently owned?
* Fewer dealers to support with advertising, marketing, training, etc. = lower costs * Fewer dealer in a given market = less intra-dealer sales competition = higher transaction prices = more profitable dealers * Elimination of poor performing dealers = improved overall consumer satisfaction of existing dealers.
 
Messages
439
Location
USA
Economics has more to do with what is going on than anything. The market is saturated with competition, and it has to be thinned out. To XS650,Thanks for the edit, maybe it would have been better if you would have deleted the entire 3rd paragraph, that way it would not be so choppy and "out of context."
 
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Messages
12,385
Location
Northern CA
 Originally Posted By: Mustang2008Z
There is still time for you to edit it out you know XS650. It would help to create the "correct ambiance."
Is the ambiance OK now?
 
Messages
439
Location
USA
The domestic car companies are reducing their dealerships to accommodate their market share, which has been reduced by the foreign competition. It will mean that automobile prices will continue their upward spiral, and the cost per hour for service will increase. The good news, is that small independent shops will get more business. The dealers may lose their franchise, but their business may continue as independent dealers, and they can survive on the used car market, and may become certified to work on specific manufacturer vehicles. Economics has more to do with what is going on than anything. The market is saturated with competition, and it has to be thinned out.
 
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