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Add models to each as appropriate. Easier to shop the brands and a heck of a more efficient model....if you want to regain market share, that is.
Regards,
OW
Robbie, dealers aren't owned by GM, however as a "franchise" line they cannot exist without GM's permission. In this regard GM gave out too many franchise contracts. GM is also required to dish out cash for maintenance and other stuffs. Put it this way, the more dealers, the more GM has to spend money to maintain them , the less profit they can make, not to mention the possibility of 2 or more same brand dealers cannibalizing each other in one area.
GM did not go overboard with opening dealerships, at least not in the last 30 years. What has happened is that competition cut the penetration, and cars sold per dealership has been reduced and therefore profit per dealer has been reduced.
Another issue is that the market has changed in the last 30 years. Where the old dealerships are, are often not where the customer is or wants to shop. As Metro areas got larger the newer import dealerships set up shop in the new areas and near the exits of the new expressways around the expanding metro area. That is why it is rare to see a import dealership located in old downtown areas. Of course some new GM dealerships were also built there but they have to compete with the older dealerships which are not that far away.
GM does have the new dealerships due to Hummer and Saturn but there are not that many and usually the owners already owned another dealership. To get one of these 2 dealerships they had to be one of the top dealers already.
The direct cost itself of having to many dealerships though is not that large but all the other indirect does take away some profit but I do not think anyone has tried to quantify it.
IMO: Pontiac Solstice -Chevrolet solstice, Pontiac G8 - Chevy Impala, Buick LaCrosse - (after reskinned) entry level Cadillac. Chevy Traverse stays, kill the clones.
If GM find it to hard to close down the Buick-Pontiac-GMC dealers, keep GMC products and kill all the equivalent products they have in Chevrolet line, or to be exact I prefer to keep GMC selling trucks and commercial vans only. This means Sierra stays, byebye Silverado, however Tahoe and Traverse stay, byebye Yukon and Acadia.
Just my 2 cents.
Due to the complicated nature of GM's management and budgeting even the most capable accountant will go nuts if he/she has to quantify it, or perhaps need 100 years to do so. :P
If they couldn't close down the existing ones, issuing additional franchise agreements and opening even more dealers to compete with newly appearing brands and dealers counts as "overboard." Especially when, as you mentioned, it leads to GM dealers competing with each other, which has a negative impact on the profitability of each one (which in turn has a negative impact on GM).
Do remember mind you that in my area I have a Chevy/Caddy dealer and a PontiBuiGMC dealer within walking distance of each other (as in 2/10 of a mile), competing with each other, and cannibalizing sales from each other. This is not a good situation.
Somewhat true but GM could not sit and watch new competing dealerships be built in the areas of new customers. They had to add franchises. Just like if McDonalds opens up at a new expressway exit then Burger King must also. Burger King cannot just say" Oh, we have a Burger King 5 miles down the road that will take care of these customers exiting at the new exit" and watch all the business go to the new McDonalds. Most of these new franchises were given those same dealership owners that are at the old dealership. The old store though is often kept.
With cars, otoh, people spend $10,000, 1000 times as much. With that much money I bet people won't mind going a few miles away to check out what others offer.
And therein lies the problem...instead, they should have offered relocation incentives, or made the franchise agreements in such a way that it was only cost-effective to keep the new store. Instead they saturated areas with dealers, and unfortunately NOT usually within the same group (that one I described? two different owners).
Remember, in that Burger King case you mentioned, one of the Burger Kings usually closes for lack of business, or cost efficiency purposes, especially when owned by the same owner. The GM dealers didn't, usually because they were different owners even though the new franchise was given to an owner with an existing dealership network, they were expanding into that area. Otherwise they WOULD have closed the old dealer, now wouldn't they? Would have been more cost effective. Instead GM put itself into a situation where its retailers were devaluing its products. Oops. Their own fault though...never did see that happen with Toyota, Honda, Subaru, Nissan, etc etc, (used to see it with Ford but they seem to have fixed it) primarily because at the corporate level, many of these started off with (or instituted later) rules regarding distance between franchises, and max number of franchises per population per area, stuff like that. It would be a good idea for GM to consider that sort of thing.
Oh, about 1.5 miles down the road from that Chevy dealer with a Pontiac dealer next-door? There's a Saturn dealer. Almost forgot. :shades:
http://www.autolinedetroit.tv/show/1245/extra2?play
I am right along with you.
Regards,
OW
Regards,
OW
Regards,
OW
Versus Chevy/Caddy/Pontiac/Buick/GMC/Saab/Saturn/Hummer
Yeah, and imagine if the town regulation requires every dealer to be in the same area, which is exactly what's happening here. The town's strict regulation means a dealer can only choose a location in 1 of 2 designated areas, thus I can find Chevy, Buick-GMC-Pontiac, Ford, Cadillac-Hummer, Audi-Porsche-MB-Saab-Volvo, Honda, Acura, Lexus and a few others within 3 block radius. Meanwhile, the much smaller other area hosts BMW, Saturn, Chrysler, Infiniti, VW, etc within 2 block radius.
You can imagine how fierce competition is around here, not to mention the chances for cannibalization.
Ford tends to keep mercury under the same roof. Same with Toyota and Scion. No other company has brands that cannibalize each other, not even Chrysler.
The bursting housing bubble "acted like a detonator that exploded a much larger bubble," he said.
"The economies of the world are falling off a cliff. This is a situation that is comparable to the 1930s. And once you recognize it, you have to recognize the size of the problem is much bigger," he said.
http://www.usatoday.com/money/economy/2009-01-19-soros-stimulus-tarp_N.htm
Every direction that you go, layers of confusion!
It's that bad. :sick: :sick: :sick:
Regards,
OW
Yup. They promised to fix the increasing gas prices in 2006 if elected. Prices hit $4.25 after that. I guess they fixed them now, so on to the rest of the country's problems? :P
I'm sure they take care of the UAW and NEA as soon as possible.
2014 Malibu 2LT, 2015 Cruze 2LT,
Imidazol, you and I, as well as everyone else in here know perfectly that soaring gas price is inevitable and it's out of the government's control. Unless, of course, the federal govt subsidize it.
I'm sure they take care of the UAW and NEA as soon as possible.
Of course, they can take the most efficient action and kill UAW right away. :P
Electric Caddy
Regards,
OW
Would not work for GM since they are already global.
Plus, with Fiat's experience in building highly credible small cars (Panda, 500 to name a few), Chrysler will have a shortcut to penetrate the smaller vehicle market.
Nice move that'll never work for GM being a global brand already.
Financial problems forced GM to stop construction of an engine plant in Flint, Mich., in December. The plant was scheduled to begin production in the fall of 2010 so Chevrolet could launch the Volt plug-in hybrid and Cruze small car for the 2011 model year.
Last week at the auto show here, GM Powertrain Vice President Tom Stephens said construction at the Flint plant has not resumed and he did not know when it would. But, he said, that would not hold up the launch of the Volt and Cruze, which use four-cylinder engines based on engines already produced in Europe.
Stephens confirmed that if the Flint plant is not ready to crank out engines, GM will bring in engines from Europe so the Volt and Cruze roll out on time. Stephens said GM has been using its global powertrain plants to shift production based on demand.
Importing engines from Europe could cost GM because of the expense of building them overseas and shipping them to Michigan.
On other powertrain topics, Stephen said:
By 2011, about 21 percent of GM's engine output will be turbocharged four-cylinders. GM plans to replace some V-6 engines with direct-injected turbocharged four-cylinders like the engines used in the Pontiac Solstice GXP, which makes 260 hp out of 2.0 liters.
"Saab has been negotiating with GM and the Swedish government about becoming a more independent company, initially as part of GM," a GM source said. Labor sources said the Swedish carmaker would take control of its decision-making and finances.
Product development and manufacturing would be done in Sweden, not as part of GM Europe.
GM has failed to find a buyer for Saab, which has been under a GM strategic review that includes possibly selling the brand. GM acquired half of Saab in 1989 and later took 100 percent control.
Although GM has no plans to use the Volt technology in the Orlando, executives note that the Orlando will be built on an architecture that easily would allow GM to do so.
"I would point out that the Chevrolet Orlando is built on the same basic vehicle architecture and component set as the Chevrolet Volt," said Jon Lauckner, GM's vice president of global program management. "So if it makes sense, it's certainly something we can take a look at."
Last week at the auto show, GM announced that it plans to build the seven-seat Orlando in the United States for 2011.
Troy Clarke, GM's president of North America, said the Delta global compact platform — which underpins the Chevrolet Cruze, Orlando and Volt — is "very adaptable" to sharing the Volt technology.
When asked whether GM is thinking about applying the Volt technology to the Orlando some day, Clarke smiled and said, "We have nothing to announce."
But GM is studying every way it could use all its propulsion systems in the future, said Chevrolet Vice President Ed Peper.
I hope so, because their first day wasn't so great with 4-6% losses on the stock markets today after the speeches.
I would expect more dissapointment. Some people figured out change and removing rancor in DC isn't happening; it is just more same old, same old people there.
It's going to be interesting how the US auto industry support works out now in DC. More support for the battered industry?
2014 Malibu 2LT, 2015 Cruze 2LT,
It was the WORST inauguration day for the DOW in its 112 year history. Wall street is not impressed with the new Prez... Hope he does better tomorrow or we may be in for a real depression. I would not blame it on Obama. It is the lame Congress we have elected that has screwed up the economy.
Am I out of luck as far as my warranty is concerned?
We have discussed this situation. Our best guess is it will NOT be covered if GM were to go OUT of business. If they file for chapter 11 bankruptcy the warranty should be fine. Most of the changes will be internal to GM. That is the most likely scenario. You should get a great deal on a GM vehicle right now, if they have one you like.
Last year Chevy gained retail market share in the US. Not a lot, but more than most anyone. This is surprising since Chevy is so truck heavy. But they did see big gains in Malibu (40%) which is primarily retail while the entire market was down. Cobalt was also only down slightly (6%) and Impala well above the entire market(15%). Chevy car was down only 5% for the year. Chevy truck was down 28%.
"We gained six-tenths of a point of (retail) market share last year," he
said. "This was the second-highest year-over-year share gain among all
car brands, behind only Honda."
Regards,
OW
percent in 2007, according to the Automotive News Data Center. Toyota
Division overtook Chevrolet as the top-selling brand in 2008, rising to
13.9 percent from 13.4 percent in 2007.
Almost complete swap in position if fleet is included. With just retail sales Chevy increased market share over Toyota. Little bit of sunlight but not much.
With the new Camaro, Equinox and Traverse Chevy should increase retail market share again this year. Big question for me is how the Impala is doing. At mid year it was 25% rental fleet. In '07 it was 32%. So while total Impala sales last year were down about an industry average 15% its retail sales % went up.
Cobalt will continue to get more rental fleet sales but if gas stays low it would not be a big player anyway.
GM needs to cut permanent staffing and plants for a market of 9M vehicles and add OT if it is higher.
GM won't do that because if they do, the business plan will show such great losses, that it will be apparent to anyone that they are NOT VIABLE, and will need more and more government $.
So GM puts a worst-case of 10.5M so that their business plan looks good to Congress, and then they don't have to make drastic changes or cuts, and they can continue thinking abbout changes for months, and the UAW can review their contracts for months. It's all BULL to delay changes.
Then you're going to see Wagoner and Gettelfinger and the other boys later in the year when things are really bad, say "Well no one foresaw how bad things could get, and we would have been okay in 2009 if Congress and the president did (or didn't) do X ...."
I know the rags have written positive reviews regarding the Cobalt SS, but I don't think many have sold. I live in the midwest and have only seen one or two on the road, vs 100's regular Cobalts. They are hard to miss with the 747 sized wing on the back.
General Motors said worldwide sales fell 10.8 percent in 2008, ending its 77-year claim as the world's largest automaker.
GM sold 8.36 million vehicles last year, putting it about 616,000 units behind the 8.97 million reported by Toyota Motor Corp. Tuesday.
The 2008 results cap an advance by Toyota that has seen the Japanese automaker overcome a 3 million deficit since the start of the decade, fueled in large part by gains in the United States. In 2008, both automakers posted sales declines.
......In the United States, the single-biggest market for both automakers, GM tumbled 22.7 percent last year, while Toyota was down 15.4 percent.
http://www.autonews.com/apps/pbcs.dll/article?AID=/20090121/ANA02/901219979/1078-
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The question is which one of them will fall more in 2009, and how high Toyota will push the cash on the hood, currently at record levels, in order to maintain its sales momentum.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)