Dude, where did all the dealerships go?

robr2 · June 2011

New England has lots of small and mid size towns so to list what dealers are in your town is not a real sampling.

In my town of 23,000 (which swells to about 100,000 during the day due to office parks) has a Honda dealer, a Kia dealer and a Porsche/Audi dealer - all owned by the same company. The Kia went into the old Porsch/Audi showroom after they built a new palace for Porsche/Audi down the road.

Within a 10 mile radius though, we have:

Toyota/Scion/Jaguar store
Chevrolet
Toyota
Nissan x2
Ford X2
Saab/Volvo store
Mazda
Hyundai
VW.
Mitsubishi

michaellno · June 2011

According to the 2010 census, the population of the town I live in is right around 48,000. We're about 15-20 minutes from the southern suburbs of Denver and about 35-40 minutes from Colorado Springs.

Even though there are a lot of makes available, the inventory selection is pretty thin.

nippononly · July 2011

as the big dealer group in a nearby city expands and contracts with the economy. Just prior to the bubble bursting they built themselves a big new luxurious dealership near the freeway - they sell Chevy, Cadillac, Hyundai, and Mazda. Each of the American brands gets its own showroom, with a separate showroom for the Asian makes just across the street.

Then the bubble goes "POP!" and right away they are feeling the pain. Finally they abandon the separate showrooms and shove all four brands into one showwroom. The one across the street sits vacant for a while, with big hopeful signs on it that say "brand new dealership for sale!!". Gradually, the signs get shabbier and more weather-worn until they fall down entirely, and about 18 months ago the dealer group sells the whole property to Lowe's, the big home improvement chain, which promptly tears down the whole facility on that site, which had only been built brand new about 3 years before, and had been occupied for less than one.

Fast forward to summer 2011, and business at Lowe's is booming, and funnily enough business must be better at the car dealer too, because what are they doing? Building a new Mazda/Hyundai showroom and service facility, LOL!

This place is like a perfect barometer of the health of the auto sales industry, with everything in the boom and bust cycle right out there on the curb for everyone to see. ;-)

carthell · July 2011

I suppose the rise of the "one owner" chain of dealerships may have been inevitable, especially in small markets around the country where very little competition exists. I hope things get better sooner than later. I know I'd hate being a "captive consumer" of one business if I needed a vehicle.

stever · September 2011

"Motor Village was set to be the ultimate Chrysler Brand dealership.

Unfortunately for them the California New Car Dealers Association dug up some annoying rule about factory-owned stores being illegal within 10 miles of a non-factory owned store and filed charges with the DMV."

Chrysler to Sell Embattled Flagship Dealership in Downtown L.A. (Straightline)

fezo · September 2011

Hmmmm....

So Chrysler, who can't manage to open a legal dealership, is going to right their ship? Looking bad.....

Those comments on teh article have it right, though - the franchise laws are way out of date.

We are holding steady on dealerships in town. We did get the new Kia dealership a few months ago. We also have a Chevy dealer within 20 miles again.

stever · October 2011

Each year, dealers collectively invest billions of dollars in facility upgrades, much of it mandated by the auto manufacturers, NADA Chairman Stephen W. Wade (above) told the Automotive Press Association in Detroit on Thursday. These costs have a significant impact on dealer balance sheets, in many cases severely straining them and in some cases even persuading a dealer to leave the business rather than commit such large sums.

Dealer Group To Study Automaker Image Programs (AutoObserver)

robr2 · October 2011

But what that article fails to say is that dealers get some of that investment reimbursed by the manufacturer by meeting sales, CSI and other goals.

By having to continually invest in their facilities, it forces dealers to keep up with the times. Been in a showroom with wood paneling in the past 10 years?

stever · October 2011

Yeah, Boise Hyundai. The storefront was spiffed up so it looks okay from the street, but it's got that concrete block aura about it once you hit the desks. The Hyundai dealer was the typical "let me go see the manager" kind of shop.

Then again, I want a deal, and if I go to a fancy showroom, I'm going to wonder how much of that overhead is coming out of my pocket.

stever · March 2012

"A federal court judge in Detroit has ruled in favor of Chrysler Group LLC in a long-running dispute with eight shuttered dealers, saying the company doesn't have to immediately reinstate them."

Detroit judge rules Chrysler doesn't have to reinstate shuttered dealers (detroitnews.com)

stever · June 2012

"Sixty-six auto dealerships opened in the first three months of the year, and the number of people employed in that part of the automotive industry is up, too.

The uptick comes amid growing auto sales. Last year, U.S. auto sales rose 10.2 percent and sales are up 10 percent through May.

In May, according to the National Automobile Dealers Association, the nation's new and used car dealers added 2,400 jobs to 1.08 million. May's total payroll was 30,000 greater than in May 2011."

More jobs, stores for auto dealers (Detroit News)

stever · October 2012

"Underriner also attacked stair-step incentive programs, which reward dealers for meeting sales goals. That can create some unfair advantages to dealers who are closer to meeting a quota, Underriner said. Those dealers can significantly beat a price that another dealer cannot because they know they can make up the cost with incentives. Competitive dealers, meanwhile, that are not close to the quota, cannot offer the same consumer-friendly deals."

Automobile dealers chairman says stair-step incentive program unfair (Detroit News)

stever · October 2012

"When electric-car company Tesla Motors Inc. started selling its flagship Model S luxury hatchback earlier this year, it eschewed the traditional dealership network to open its own stores.

But that's not sitting well with U.S. auto dealers, who have controlled new-vehicle sales for nearly a century.

Over time, car dealerships became crucial sources of employment and tax revenue for local communities. To prevent manufacturers from opening their own stores and undercutting neighborhood dealers, states developed laws governing the franchise relationship. Bottom line: Carmakers had to leave their retail sales to someone else.

Tesla isn't buying it. The company wants to sell directly to consumers. That way it gets to keep the profit that dealers make on new-car sales. It's also the only way an electric car will get a fair shake, co-founder and Chief Executive Elon Musk said."

Electric-car maker Tesla bucks traditional dealership network (LA Times)

carthell · October 2012

Yay for Mr. Musk! Drivers (no pun intended) of change never get any respect initially. I hope that Tesla survives this trial-by-fire. (The car dealer associations sure picked an underhanded way to ~~extract a profit from someone else's efforts~~ struggle through the current economic downturn.)

stever · January 2013

"A new online service enables car shoppers to test drive vehicles without going to a dealership.

Tred, a Seattle startup with ties to former GM CEO Rick Wagoner, cuts dealership trips by delivering new vehicles for consumers to test drive and possibly purchase.

Tred drivers, not salespeople, deliver the vehicles wherever the shopper wants. The service ensures that dealerships can keep salesmen on the floor at all times, the company said."

Seattle startup tied to Wagoner delivers cars for test drives (Automotive News)

carthell · January 2013

Rick's been doing a few things since his ouster from GM, a Google search shows. Mainly, sitting on boards of other corporations and at least one university it appears.

If it were me, I would not mind Mr. Wagoner's counsel in the new business. You don't work for one of the largest companies in the world for 30 years, even a declining one, without picking up some skills and knowledge that can be taken, rebuilt, and applied in a new way.

stever · February 2013

"The number of car dealerships in the U.S. remained stable in 2012, but the volume per store set a record, according to data released Thursday by Urban Science, a Detroit-based retail consulting firm.

There were 17,851 dealerships in the U.S. in 2012, up 0.5% from the previous years 17,767. The industry lost some Saab and Suzuki dealers, but that was offset by stronger overall sales, said vice president John Frith.

Most dealers who survived the downturn in 2009 are thriving."

U.S. car dealerships post record sales in 2012 (Detroit News)

otis12 · February 2013

I know Ford wanted to shrink the # of Lincoln dealers and here in North Jersey, we've lost about half of the dealerships thru closures and at least one merger. I'm also seeing some odd combinations of brands under one owner/location. A Ford dealer added Kia a few years ago and about one year ago, added Infinity. So you got those three brands in one location, tho each has its own showroom. Just kinda odd to see Kia/Infiniti/Ford models side by side in one large lot.

stever · February 2013

That is a bit odd. I'm used to seeing "second tier" brands together, but Ford and anyone other than Lincoln (or Mercury, back in the day) is odd.

The strange one up in this area (although it's over in N. Wisconsin), is a joint Toyota/Honda dealer.

otis12 · February 2013

Toyota/Honda? That is very odd, though it must make cross-shopping easier for consumers looking at an Accord vs. Camry or Civic vs. Corolla.

stever · February 2013

Yeah, here's their website. Can't imagine there's too many other dealers around with that combo.

stever · April 2013

A petition on WhiteHouse.gov urges the Obama Administration to overturn franchise laws that limit auto manufacturers from selling their vehicles directly to consumers.

Will Tesla seek federal help to end its war with state car dealers? (venturebeat.com)

explorerx4 · April 2013

A local group has Honda, Nissan and Toyota together. Each brand has it's own showroom.

carthell · April 2013

I was intrigued enough to add my name to the petition, although I'm not sure how far it would go if lots of people e-signed the petition. At the minimum, it may take a regulation issued by the FTC to enact such a thing. That's assuming the "Party of No" (GOP) doesn't sue or enact counter-legislation against it, bolstered by various private party and general attorney lawsuits. :sick:

stever · April 2013

Well, the car dealer lobby is pretty strong and that means they spread the political dollars around to all the politicians. Especially on the state and local level. I think it's more than a red/blue issue.

I suspect the manufacturers will lie low on this one, while the dealer lobby will say they're protecting innocent consumers from rip-off artists, aka curbstoners.

stever · June 2013

"If Tesla is successful in establishing its own retail network, it could open the door for other new companies, such as Chinese auto makers, to set up direct sales networks, legal experts say. Dealers worry that existing car companies might try to create new subsidiaries to sell vehicles directly to consumersa tactic General Motors Co. GM and Ford Motor Co. flirted with during the late 1990s before retreating in the face of a dealer backlash.

Dealers have "an essential monopoly on their business and they want to maintain it," said Diarmuid O'Connell, Tesla's chief of business development. Car dealers and alcohol distributors, he said, are the rare businesses still vigorously fighting disruption by the Internet."

Tesla Clashes With Car Dealers (Wall St. Journal)

stever · July 2013

"Tesla CEO Elon Musk said that an "anonymous Tesla enthusiast" started a petition to put before President Obama. The petition has passed the required 100,000-signature threshold to merit a response from the White House."

Would You Sign the Petition?

stever · November 2013

I may as well go buy a car where I don't have to talk to anyone.

Now You Can Buy A Car From A Vending Machine (businessinsider.com)

In other news, Craigslist is going to start charging dealers $5 an ad to post a car ad. Should cut down on the spam and dupes a bit at least.

Mr_Shiftright · November 2013

The petition is a waste of time, because the franchise laws are state-regulated, so sending petitions to the White House is going nowhere, and states are not going to undermine the good 'ol boy network.

They might allow a factory store or two.

stever · December 2013

The latest in Ohio:

"The Ohio Dealers Association is backing an amendment to Ohio Senate Bill 137--an unrelated bill that requires Ohio drivers to move left so as to leave an empty lane between themselves and highway maintenance vehicles at the side of the road.

Attaching the anti-Tesla amendment to an uncontroversial bill already moving toward adoption could see it become law more quickly than on its own.

The proposed amendment would ban Tesla's practice of selling its electric cars directly to customers, who place their orders online with the company after seeing and learning about the Model S in company-owned stores."

Tesla Faces Off Against Car Dealers In Another State: Ohio (greencarreports.com)

nippononly · December 2013

the bottom of the recession, when quite a number of dealerships in my area had closed (some in the middle of the night, leaving a big surprise for their employees the next morning), we have seen a lot reopen, and even some new brands such as Mini and Kia come into the area. But Chrysler and GM did not come back. Ford went from two dealers to one, but that one now does very brisk business and is looking to expand.

For GM or for Chrysler, I have to drive out of county at least a half hour, which is not something I am likely to do. I wonder how the GM and Chrysler dealer networks are recuperating on the whole. I have not read that they made any concerted effort to redistribute dealerships evenly, but rather just let the failing ones close because they had too many by far.

Dude, where did all the dealerships go?

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