Ferrari Mailing List: Re: NFC: Dodge Dealer's outrageous story in newspaper

[Brian E. Buxton (BrianBuxton]

All car dealers make money wholesaling cars to their dealers.  At one 
time Chevrolet made $14,000 on every Suburban that it sold to a dealer 
for inventory.  And often times the factories make money financing those 
same cars on the dealers floor plan.  However, one reason Chrysler & 
others want to remove some of their dealers is that the cost of 
maintaining their delivery network and marketing for so many locations 
is not feasible now that their sales are off almost 40% from previous 
years.  Another is that over saturation causes dealers to have to 
compete so aggressively for sales that it lowers the residual value of 
the cars.  When I bought my first diesel Chevrolet truck in 2002 there 
were 7 Chevrolet dealers in Indianapolis, all competing for my 
business.  And each one was basically offering to give the truck to me 
just to move it off their lot.  Competition is good, but sometimes too 
much can be harmful.

Brian







LarryT wrote:

> I read the ones being closed were not necessarily weak or failing - they 
> closed the stores that were not selling quantities of the major franchises. 
> Something like 61% of the dealrships sold a small % of the total sales.  So 
> those are being closed.
>
> Does anyoneelse wonder why closing sales outlets are a good thing?  Does it 
> cost Chrysler money to wholesale a car to a dealership?
>
> Maybe it's different than I think - which is - a dealership *pays* for the 
> privilidge of buying cars at a reduced rate so they can turn around and 
> resell them to the public.
>
> How does closing the stores that are selling cars *save* money?  Does it 
> cost Chrysler money to have those "lower performing" stores open?
>
> LarryT
>
> https://www.nrahq.org/nrabonus/accept-membership.asp
>
> Free 1 year NRA membership to anyone interested!
>
> ----- Original Message ----- 
> From: "Rick" <Forza355 [at] verizon.net>
> To: "Larry Turner" <l02turner [at] comcast.net>
> Cc: "The FerrariList" <ferrari [at] ferrarilist.com>
> Sent: Wednesday, May 20, 2009 7:18 PM
> Subject: Re: [Ferrari] NFC: Dodge Dealer's outrageous story in newspaper
>
>
>  
>
> > Inferring from the letter, it sounds like he had a successful dealership 
> > even in the bad economy and had it ripped away and given to another 
> > dealership. I thought only the weak & failing dealers were supposed to be 
> > folded.
> >
> > Rick
> > ----- Original Message ----- 
> > From: Larry B
> > To: forza355 [at] verizon.net
> > Sent: Wednesday, May 20, 2009 7:09 PM
> > Subject: RE: [Ferrari] NFC: Dodge Dealer's outrageous story in newspaper
> >
> >
> > This is just a guess: the franchise agreement (or whatever the relevant 
> > contract might be called between the dealer and Chrysler) presumably says 
> > that Chrysler may, on something like 30 days' notice, freely terminate a 
> > dealer's franchise.
> >
> > I'm not saying it's a humane way to treat a dealer, and as I said it's 
> > just a guess.
> >
> > > From: Forza355 [at] verizon.net
> > > Date: Wed, 20 May 2009 19:01:57 -0400
> > > Subject: [Ferrari] NFC: Dodge Dealer's outrageous story in newspaper
> > > CC: ferrari [at] ferrarilist.com
> > > To: larrybard [at] hotmail.com
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--

Brian E. Buxton, President



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