Auto Dealership Deathwatch

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Does anyone know what happen to the Tustin Lincoln dealership?

If you drive by the entire lot is empty. Did they move or go out of business?
 
no_vaseline said:
The end is here.

GM just announced via CNBC they were either selling Pontiac or shutting it down.
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They should also showdown Buick while they are at it. Honestly, the only the only brand that should exist for GM is Chevy.
 
usctrojanman29 said:
no_vaseline said:
The end is here.

GM just announced via CNBC they were either selling Pontiac or shutting it down.
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They should also showdown Buick while they are at it. Honestly, the only the only brand that should exist for GM is Chevy.
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Buick is the premier GM brand in China, like Opal in Europe. GMC stays.

Word on the street is the Power Volvo and Power Chevy dealerships in the Irvine Auto Center are planning to merge to one location. That will make three vacancies. Saturn is soon to shut down, that'll make four.
 
32 Chrysler dealers got the notice. Their inventory is to be sold to remaining dealers. Is there a way I can get a great deal on a Wrangler on the back of it?
 
earthbm said:
32 Chrysler dealers got the notice. Their inventory is to be sold to remaining dealers. Is there a way I can get a great deal on a Wrangler on the back of it?
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32? You mean 799 nationwide or 32, well, what do you mean?
 
So GM and Chrysler are forcing a bunch of their dealerships to close... How does that help GM and Chrysler corporate? I don't see how this saves the corporate entity ANY money. If we were to think of this in "housing" terms (this is a housing blog, after all!) it would be like the following:

I need to reduce my electric bill in my home. I have 48 electrical outlets in the walls. I'll reduce the number of outlets to 36 and save electricity? That's just not the way it works, unless I reduce the number down to the point that I can't plug everything in, and I'm forced to use less electricity. But I don't see the auto company's problems as having to "force" customers away by reducing dealer locations.

The auto company's cost of production has little or nothing to do with the number of dealerships, does it?
 
GoIllini said:
So GM and Chrysler are forcing a bunch of their dealerships to close... How does that help GM and Chrysler corporate? I don't see how this saves the corporate entity ANY money. If we were to think of this in "housing" terms (this is a housing blog, after all!) it would be like the following:

I need to reduce my electric bill in my home. I have 48 electrical outlets in the walls. I'll reduce the number of outlets to 36 and save electricity? That's just not the way it works, unless I reduce the number down to the point that I can't plug everything in, and I'm forced to use less electricity. But I don't see the auto company's problems as having to "force" customers away by reducing dealer locations.

The auto company's cost of production has little or nothing to do with the number of dealerships, does it?
Click to expand...

GM/Chrysler needed to sell a certain volume of cars because of thier UAW contracts. If they shut down the line, they still had to pay 80% of the wages, so it was cheaper to continue to build cars and lose money on them. That glut of cars made things super competitive between dealers, so they weren't getting paid.

This new batch of cars will be smaller, lighter, and have smaller overall price tags. That means they need to cull dealers so everyone can build some margin back into the product. We sold over 20 million cars in 2000, this year we are going to sell 9 million (across all makes in the US). IMO that means they need to shut down half of the dealer force. With tightening credit the days of stacking a lot and letting fly is over. Most dealers were selling cars at or near cost, so they could get the volume holdback rebates at the end of the quarter. Those "volume incentives" are over.
 
no_vaseline said:
GoIllini said:
So GM and Chrysler are forcing a bunch of their dealerships to close... How does that help GM and Chrysler corporate? I don't see how this saves the corporate entity ANY money. If we were to think of this in "housing" terms (this is a housing blog, after all!) it would be like the following:

I need to reduce my electric bill in my home. I have 48 electrical outlets in the walls. I'll reduce the number of outlets to 36 and save electricity? That's just not the way it works, unless I reduce the number down to the point that I can't plug everything in, and I'm forced to use less electricity. But I don't see the auto company's problems as having to "force" customers away by reducing dealer locations.

The auto company's cost of production has little or nothing to do with the number of dealerships, does it?
Click to expand...

GM/Chrysler needed to sell a certain volume of cars because of thier UAW contracts. If they shut down the line, they still had to pay 80% of the wages, so it was cheaper to continue to build cars and lose money on them. That glut of cars made things super competitive between dealers, so they weren't getting paid.

This new batch of cars will be smaller, lighter, and have smaller overall price tags. That means they need to cull dealers so everyone can build some margin back into the product. We sold over 20 million cars in 2000, this year we are going to sell 9 million (across all makes in the US). IMO that means they need to shut down half of the dealer force. With tightening credit the days of stacking a lot and letting fly is over. Most dealers were selling cars at or near cost, so they could get the volume holdback rebates at the end of the quarter. Those "volume incentives" are over.
Click to expand...

It seems you're pushing on a string if you approach it from the dealer's direction. They are not the drivers of excessive cost of production or lack of sales. If there's a "glut" of production, then produce fewer cars. Use BK to negate the illogical UAW contracts and legacy costs. Quit offering incentives and rebates. Close some plants. But that has nothing to do with the number of dealers.
 
Half the volume = half the dealers.

If the mfg. doesn't take them out, the market will. It's worse for the customer and the mfg if the market takes them out. Having your vehicle in for repair (aka all torn down) at a dealership that is going out of business royally sucks. These guys in the shop got 2 or 3 hours notice the dealership was closing from what I saw - and that notice is "hey, we're closing at 5. Pack up your stuff and make arrangements to get it out by then if you want to keep it."
 
So OK, who do we turn to now if we want to buy a fast depreciating, poorly built, unreliablle, ugly and outdated Gas guzzler?
 
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