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Dude, where did all the dealerships go?

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  • gagricegagrice Member Posts: 31,450
    Look at the bright side. With dealers going out of business there will be turn key facilities for companies like Tata and Chery to set up dealerships. Or any one of the EV dealerships that will be starting up in the next couple years.
  • nippononlynippononly Member Posts: 12,555
    this morning with the San Francisco GM dealer that recently went out of business after more than 60 years of operation.

    I was intrigued to note the owner report that 86% of the San Francisco regional market belongs to the imports, with only 14% market share for all three domestics combined. No wonder he was having a tough time making a go of it.

    I expect there will be a few more failures of domestic dealers in my area before it is all over.

    gagrice: I wouldn't be surprised to see something some have already speculated might happen: SAIC begin to sell its own vehicles through former (and/or current) GM dealers in the U.S. I would think that would be less than five years out.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • gagricegagrice Member Posts: 31,450
    If GM were to pull the plug on US operations, it would be less than 5 years. On a side note. My friend that had many years at a big Ford agency, lost his mechanic job. He thought he had another shop lined up and they closed this weekend. I got it from his wife. Not sure which dealership it was.
  • nippononlynippononly Member Posts: 12,555
    I was kinda wondering if there wouldn't be a way in which GM could somehow distribute SAIC cars through its network and profit from the arrangement....

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • lemkolemko Member Posts: 15,261
    Good idea on an individual basis. However, if people kept hoarding their money and keeping their old hoopties, the recovery will never happen.
  • boaz47boaz47 Member Posts: 2,747
    You could be right. But maybe someone will come along and make a practical entry level car at realistic prices. There is simply no excuse for a 15K Smart car. Not in R&D and not it cost to manufacture. At best it should be a 8K car. It isn't as technically as advanced as a motorcycle. Take the Auto industry down a peg and find other ways to get from point A to point B and maybe we would get the cars we deserve rather that the cars they feel like making. All auto dealers should be like Saturn or Lexus not like VW. When you walk in you are the customer and shouldn't be treated like a patsy. So if the auto dealers are suffering maybe they should think about treating customers like they matter rather than a cow to milk. But that is just how I feel. I will not be interested in any "new" car produced right now because they are not "new" but only redone from what they already had. Even the new small diesels they are talking about sending are only cars they already produce some place else. So I will drive what I have till the wheels fall off unless they come up with something that that is truly new and worth looking at.
  • explorerx4explorerx4 Member Posts: 19,256
    i drove by a closed ford dealer a few days ago, and there were 2 model t's in the showroom. :surprise:
    2023 Ford Explorer ST, 91 Mustang GT vert
  • fintailfintail Member Posts: 57,097
    I wonder if they were leftover '27s ;)
  • boaz47boaz47 Member Posts: 2,747
    We managed to live through Nissan trying to fold and selling off its Financial arm to Renault. Kia went belly up and Hyundai was forced to buy them so they wouldn't be a monopoly in Korea. Saab was bought lock stock and barrel as was Volvo. Most of the household names england are now owned by the Germans or the US. Isn't the Queens vehicle of choice owned by Ford? We can survive this as well. We simply don't need as many dealers as we have.
  • steverstever Guest Posts: 52,454
    Bill Buckner's auto dealership closes

    Yeah, that Bill Buckner. He had a Chrysler shop up the road.

    The same TV station (KTBA) is running this story too:

    "Dan Wiebold Jr. has been selling cars for over 20 years and says dealers across the country are taking an unprecedented hit.

    "They're closing up at roughly two a day which is 60 a month nationwide," said Wiebold. "

    Local auto dealers hope Congress will save their industry
  • gagricegagrice Member Posts: 31,450
    My question again. How will the bailout to the BIG 3 help the dealerships AT ALL? If people ain't buying, they will go broke. I heard the expected number for 2008 is 1000 dealerships. The Toyota dealer I bought my Sequoia from is under new owners.
  • steverstever Guest Posts: 52,454
    Well, if the automakers get stabilized and credit eases, people will start buying cars again, and they can't buy them direct or from Wal-Mart. Some dealers will either survive or new ones will fill the voids.
  • gagricegagrice Member Posts: 31,450
    I don't think we will see the EZ credit from the past 15 years again. At least I hope not. That is what got US where we are today. 7% to 8% home and auto loans should be the standard for good paying borrowers. Don't expect a buying spree in new cars for several years.
  • nortsr1nortsr1 Member Posts: 1,060
    Well, if the dealerships "close" of their own fruition, it would probably mean that GM, Ford or Chrysler would have a lot less dealerships to "buy out"???? I have to assume when a dealership closes because of lack of sales or whatever, they would not be a "costly buyout" to one of the Big 3????
  • gagricegagrice Member Posts: 31,450
    That may be true. It is also one less point of sale for GM or Ford or whoever. I understand getting rid of rebadges and poor selling brands. I do not understand cutting the number of dealers. If your town does not have a Chevy dealer but has a Toyota, who will get the business most of the time?
  • nippononlynippononly Member Posts: 12,555
    Yes, that's the other side of the whole equation, right? Sure dealerships are the front lines and you have to feel bad that they are suffering through no fault of their own, but since many if not most of the ones going out of business are domestic-branded dealerships, and since the domestics need such a drastic reduction in their dealer networks in the next few years (assuming the automakers make it at all), isn't it in some ways a small favor to the industry overall?

    However, that doesn't change the fact that dealerships going out of business are another big contributor to unemployment, and to big outlays of benefit payments from the states.

    Edit...gagrice: If your town does not have a Chevy dealer but has a Toyota, who will get the business most of the time?

    I don't think there ARE any cases of that though. It's quite dramatically the other way around: a Chevy dealer (and a Ford dealer) in every small town, where you have to drive another 20-50 miles to find the nearest Toyota dealer.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • larsblarsb Member Posts: 8,204
    Heard a story on NPR this week that GM still has over 6000 dealerships, and that about 4800 would be ideal for the brand.

    Only a bad economy can force a dealer to close - GM cannot.

    It's in GMs best interest for about 1200 more dealerships to fold.
  • steverstever Guest Posts: 52,454
    Bill Gates raises AutoNation stake to 12.2% (South Florida Business Journal)
  • steverstever Guest Posts: 52,454
    Rider Auto files for bankruptcy (Centredaily.com)

    "STATE COLLEGE — Declining sales and revenue have forced one local car dealership to file for Chapter 11 bankruptcy."
  • gagricegagrice Member Posts: 31,450
    With over 300 dealerships Bill Gates will be able to get a great deal on any car he wants.. :shades:
  • lemkolemko Member Posts: 15,261
    Apparently, another dealer is a casualty of the economy: Eckenhoff Cadillac-Buick-Pontiac-GMC in Jenkintown, PA apparently closed doors sometime within the last month. I went to the PetSmart for food for my cats and I look across the street and see his lot devoid of cars or any sign of life.

    I feel really bad because Mr. Eckenhoff seemed like a really nice guy. I never bought a car there, but I often went there for parts for my 1988 Buick Park Avenue and 1989 Cadillac Brougham as his dealership was closest to me. My local chapter of the Cadillac-LaSalle Club had shows there in 2006 and 2007.
  • nippononlynippononly Member Posts: 12,555
    I am surprised he didn't dump P-B-G and keep Cadillac. Cadillac dealers as a group are doing pretty well, I thought.

    Still, GM needs a lot more like him to go out of business. I STILL say I would like to see Congress help the auto industry suppliers and the folks like Mr. Eckenhoff with the transition to 1 U.S. automaker rather than throw billions of dollars at GM and Chrysler.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • fezofezo Member Posts: 10,384
    I don't know. We had a Chevy - Cadillac dealer and he closed up the Cadillac dealership and is still selling Chevies.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • steverstever Guest Posts: 52,454
    "To help dealers temporarily, the national auto dealers' group is seeking access to a Small Business Administration low-interest loan program, which dealers used in the 1980s for greater access to working capital. They're unlikely to receive such access this month, but it's been discussed as a potential piece of a Democratic economic stimulus package early next year.

    Many dealers are also eager for the tightness in the credit markets to ease, noting that their biggest problem is a clampdown on loans to potential buyers in recent months.

    "Washington doesn't need to give dealers anything," said Mike Charapp, a Virginia attorney who represents car dealers in the Southeast. "They need to do some things to open the credit taps."

    Auto dealers, business dead, say they deserve help, too (McClatchy)
  • explorerx4explorerx4 Member Posts: 19,256
    just because some can hit a baseball, not necessarily field one, or maybe understand how to run a business...
    2023 Ford Explorer ST, 91 Mustang GT vert
  • explorerx4explorerx4 Member Posts: 19,256
    people also need to have jobs to support a car payment.
    2023 Ford Explorer ST, 91 Mustang GT vert
  • boaz47boaz47 Member Posts: 2,747
    "people also need to have jobs to support a car payment. "

    well now you know where the dealers have been headed for some time. Once we started exporting our jobs off shore it was only a matter of time before people couldn't afford to support cars and a house and all the other goodies we exported off shore.

    Still I have to wonder if Suzuki and Subaru will weather 2009 without losing a dealership or two? They weren't all that plentiful in the first place.
  • nippononlynippononly Member Posts: 12,555
    In that article they mention government incentivs to consumers to buy cars, but I think consumers need direct government lending for a while if they are to buy enough cars to help out all the dealers in trouble.....

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • gussguss Member Posts: 1,167
    Funny you mention Eckenhoff, a co-worker came into my office yesterday and said they closed over the weekend. No going out of business sale or anything. I guess they get a better price sending them back to GM, than the expense of selling them ?

    I work near them, and a few years ago they were picketed by a mechanics union. The strike lasted 4 or 5 months, that may have hurt them a bit.

    I test drove a Pontiac G6 and G8 there over the summer. It was a Tuesday on my lunch and they seemed busy. They must have had alot of no sales like me.
  • gagricegagrice Member Posts: 31,450
    I think tax credits are preferable. Then you do not get people strung out financially that should not be. Easy credit got US where we are today. The government meddling in the mortgage business was probably the root cause of all the current problems. We need to get back to sound lending practices. You don't qualify, you don't get that new car or home loan. I would also like to see a lending cap on interest rates. I think some states like MN already are set at 12%. These CC companies are making it more difficult for people in trouble to get out with 20-30% and higher interest. If they are not a good risk at 12% they should not have the money. I know our Credit Union has not wavered and do not have the problems many banks have today.
  • lemkolemko Member Posts: 15,261
    Well, Eckenhoff had only been there for about two or three years. Before that, it was called Fairway Cadillac. Didn't know about the strike as I always had my car serviced at the dealership from which I bought it. All I know is they kept the same parts guy when they changed ownership. I was shopping for a car last fall and they sent me email inviting me to look at a car, however, I had already purchased my DTS from the same dealership and salesman I from which I bought my 2002 Seville STS. I did talk to a salesman at Eckenhoff, but they didn't have the kind of DTS I was looking for. I wanted a Luxury III or a Performance, but Eckenhoff only had a lot of the lower end models.
  • ingvaringvar Member Posts: 205
    True!!! Dealer have to sale high quality service and car with the service. Service must on a good level at reasonable price.
  • dtownfbdtownfb Member Posts: 2,918
    Not sure about Suzuki but Subaru is one of the few manufactures that is relatively close to their 2007 sales numbers. They finally updated their lineup this year and it appears to be working. Of course they will not hit their sales goals but still a solid year for them considering the market.
  • nippononlynippononly Member Posts: 12,555
    Subaru is one of only two automakers that is up for the year (1.2%). Daimler is the other.

    THOSE dealers must be happy.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • boaz47boaz47 Member Posts: 2,747
    "They finally updated their lineup this year and it appears to be working. Of course they will not hit their sales goals but still a solid year for them considering the market."

    Yes I agree but the little guy still has to survive 2009 and no one is looking at dealers like Subaru and Suzuki. Subaru has a very loyal fan base but if sales are flat again for 2009 how will they survive? Subaru has very little for the mainstream entry level buyer and Suzuki doesn't have the brand loyalty to hold off the wolf for another 2 or 3 quarters. Neither Subaru nor Suzuki is cash flush like Toyota and I doubt they will be exempt from another short fall next year. I believe we are heading into at least a two year slump and I don't think credit will be freed up till 2010 or 2011. Both Subaru and Suzuki have been on the ropes in the US before in the US and while the dodged the bullet so far I just wonder how well they will do over the long run?
  • nippononlynippononly Member Posts: 12,555
    Seems like they didn't HAVE a choice - 20 sales a month? That's not sustainable for any business I wouldn't think, especially one with a staff of 20 people.

    This part caught my eye:
    Some remaining employees declined to be interviewed, saying they were so angry about GM and GMAC, they feared what they might say and the trouble that might cause.

    Ken Keiffer was willing to talk. He can't say enough about a family that gave him work when he needed something to keep him busy after he retired as a mechanic 13 years ago and his wife died five years ago. As a "lot man," his job was to move cars around the dealership. When the layoffs started earlier this fall, the 75-year-old widower insisted the Weeds stop paying him.

    But he continues to show up every day, not so much to move displays, but "because I like the people," he said. "I just can't see why the government doesn't bail these people out."


    It would seem there are folks even at GM dealerships that blame GM for the mess the dealers are in, rather than hard economic times. I would agree with them - boneheaded management is the majority cause of GM's current woes.

    AND there seem to be folks besides me that think that some of the bailout money should be trickled down to dealers, not just to the fat cats in Detroit. But if you are willing to bail out dealers, the question then becomes: dealers of which brands? Because if it is inevitable that some manufacturers are on the road to bankruptcy in the next 12-18 months, what good does it do to bail out their dealers now? That is precisely why there are unemployment funds in the first place.

    Another question I have is this: do the Weed brothers also perform factory service at their dealership, and sell used cars as well as new? Because I thought used sales and the service department are where new car dealers make all their profits anyway, and those are much less impacted by the frozen nature of the credit markets and the unavailability of GMAC loans in particular.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • andre1969andre1969 Member Posts: 25,655
    Another question I have is this: do the Weed brothers also perform factory service at their dealership, and sell used cars as well as new? Because I thought used sales and the service department are where new car dealers make all their profits anyway, and those are much less impacted by the frozen nature of the credit markets and the unavailability of GMAC loans in particular.

    I'd always heard that too, that the bulk of profits came from used cars and the repair shop. New car sales are often lucky to break even. However, with new car sales dried up, I guess that would reduce the supply of used cars? Fewer new car sales would also equal fewer trade-ins, as people hang onto their old cars longer. And even people who might trade in their old car on a newer used car, might still hold onto their car longer.

    As for servicing, well fewer sales will mean fewer cars to get serviced, but there could also be other factors at play. Perhaps people are driving less in this economy, so scheduled maintenance comes up less often. And with money being tighter, I'm sure some people are skimping on maintenance, pushing their intervals out further. Could be penny-wise and pound-foolish, but most people just think short-term. This economy could also be pushing people to seek out a cheaper independent mechanic, bypassing the dealer. And like skimping on service, maybe people are also skimping on repairs, putting things off longer than they should?

    While the GMAC thing might not impact used car loans, there are other factors. People can't tap into their home equity as easily as in the past. I'm sure that was the cash source for a lot of purchases. And aren't regular banks, credit unions, etc, tightening their standards as well? A couple months ago, I actually got declined for a Shell Mastercard! I wanted to get it because they were offering 5% off on Shell gas purchases. I dunno what my FICO score is these days, but the last time I checked, 2006, I think it was around 759.

    I gotta say, I was actually offended that they declined my application! It was a new experience to me. Maybe auto loans are different from credit cards, though?
  • bvdj84bvdj84 Member Posts: 1,724
    I just got a few emails about 09 Acura Leases, and the TL and TSX are new this year, and they are already offering amazing deals, never before would they offer it this early within its debut. First off, the Cadillac brand is nice, like the CTS, but when compared to other brands, its competitors offer more bang for the buck. Having a $600 lease payment is pretty strict when there are other cars that offer pretty much the same fun and appeal. Now, people are going to be scared of GM.

    I plan to get an Acura TSX. $355 a month lease. Not bad!
  • lemkolemko Member Posts: 15,261
    A $600 lease payment on a CTS? That doesn't seem right. My payment for the purchase of my DTS isn't even $600. For $600, I could probably lease a 7-Series or an S-Class.
  • bumpybumpy Member Posts: 4,425
    Those subsidized sweetheart lease deals from GMAC have gone bye-bye with GMAC. No more $299/mo with $0 down for a CTS.
  • fintailfintail Member Posts: 57,097
    I bet the 49K loaded CTS I saw would lease for $600 here, after taxes for sure.
  • jchan2jchan2 Member Posts: 4,956
    I think a 7-Series or S-Class would be a lot more than $600/month; the Mercedes special on the E-Class is something like $519/month for 39 months.

    Yeah.. Lease shoppers are most likely not going to be leasing from GMAC, Ford, or Chrysler as the specials have basically all dried up.

    $349/month for a G35 though isn't too bad (current lease special)
  • nippononlynippononly Member Posts: 12,555
    About 2,000 U.S. new-vehicle dealerships — nearly one of every 10 — will close in 2008 and 2009, the National Automobile Dealers Association projects.

    And that's the best-case scenario, under which no automaker files for bankruptcy or dies next year. A bankruptcy would accelerate dealership shutdowns.

    The Detroit 3 are trying to consolidate and shrink their dealer networks. But many of the closings so far do not involve the metro-area stores the automakers want to eliminate.

    Peter Welch, president of the California Motor Car Dealers Association, offers even a more dire forecast than NADA. He said California lost 116 dealerships in the first 11 months of 2008 and has just over 1,500 new-vehicle dealerships left. He believes closures will total 150 by year end and predicts as many as 500 closings in 2009.


    ......For much of 2008, Detroit 3 dealerships accounted for about two-thirds of store closures, NADA chief economist Paul Taylor says. That share will rise to more than 80 percent next year, Taylor predicts.

    ......Next year, Taylor predicts 1,100 dealerships will close and 200 will open, for a net loss of 900. "The new dealership openings will be largely offshore brands, including Mahindra and Mahindra of India," he said.

    ..........Joe Pfeffer's Chrysler dealership has operated in Belleville, N.J., an urban area next to Newark, for nearly 67 years. In October, Pfeffer had to close the dealership and give up the franchise.

    His bank stopped financing all auto dealer inventory several months ago. Pfeffer contacted other lenders to finance the store's vehicle inventory, but none was willing to take on another domestic dealer account, he said.

    Two years ago he was selling 50 new vehicles and 15 to 20 used vehicles per month. In September, his last month in business, Pfeffer sold seven new vehicles and about five used.


    Apparently, in the recession of 1980 there was a net loss of 1550 dealerships out of 28,000. Even if the Treasury secretary hands the domestics a bunch of money now it will not stop the inevitable continuing sales slide and the loss of more of these dealers. And unlike what I thought MIGHT be the case, it is no "blessing in disguise" for the domestics because the WRONG dealers are closing. What an odd thing it is that there are RIGHT and WRONG dealers to be going out of business for Ford GM and Chrysler.

    http://www.autonews.com/article/20081215/ANA06/812150361/1203
    (registration link)

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • boaz47boaz47 Member Posts: 2,747
    It is also service and parts at those dealers suffering. Many of the independents that I talk to seem to be feeling pretty good as people seem more willing to spend the money to keep their old cars running. But at the same time people aren't servicing their new cars as much as they used to. Maybe they just aren't using the dealers to service the cars I don't know. But I have a few friends who are in the business of servicing corporate fleets and as budgets are decreased so is the call for preemptive servicing. It is more than cars it is also work trucks and equipment. Two of the larger equipment companies that service forklifts and other equipment for the School district in the Inland Empire may be going out of business. If not they at least are cutting back staff to the bone. This may end up being a good thing as it might teach people that they don't need a new car every three years and the imports will have to start making parts for cars past the ten or fifteen year mark. However this could also be a boon to the after market industry.
  • carlsasccarlsasc Member Posts: 1
    I have often wondered whether there are more cars owned and driven or parked on new and used car lots. Frankly, I would rather buy a house than an automobile from GM. Untrained salespeople, overpriced repairs, warranty resistant service departments. Who needs it?
  • boaz47boaz47 Member Posts: 2,747
    You know you may actually have a very good point. Maybe it is time we reassess the use of the automobile as our major form of transportation. This could be a great time to establish other forms of public transportation and maybe we could cut down on the damage we do to the environment and improve our standard of living at the same time. The problem however is unemployment. The people that lose their jobs during this transition will not feel it is a better world we are trying to make.
  • gagricegagrice Member Posts: 31,450
    This could be a great time to establish other forms of public transportation and maybe we could cut down on the damage we do to the environment and improve our standard of living at the same time.

    My wife and I were sitting in a traffic jam on our bi-weekly trip to Costco. It dawned on us just how impractical the suburbs really are. You are spread out too far to not have a car yet you are in constant traffic and the home next to you is within earshot of their stereo. If we were to ever abandon the country life it would probably be in a high rise where we would not need a car except for trips when we could rent. The real problem is most city digs are a lot more expensive than the burbs or country living.

    So far I have not seen any dealerships closed up. We don't get out to the big auto malls very often so they may be closing some.
  • boaz47boaz47 Member Posts: 2,747
    I guess I am lucky in that the area we moved to started out as a retirement community as did several areas around us. Sun City, Temecula, Beaumont, Banning, Paris and Lake Elsinore all have reasonable prices without being stacked into high density living. They all have large shopping centers so there is no need to travel very far and the down town area is mostly on one street maybe two at the most. A sensible public transportation system would allow many of the people in this area to live car free or at least car light. Sun city allows golf carts on most of their streets and with a range of 20 miles a person could drive anywhere they wanted to without starting up one internal combustion engine. Most of these smaller cities are pretty self sufficient so that their is no need to ever travel into the big cities except to get to the airport. With this style of city structure it would be a lot easier to establish car free areas like the ones proposed or established in places like Santa Monica and Davis California. We have a big auto mall stuck out on the edge of town and I can't say I have paid much attention to how their dealers are doing. But I have seen some close in Redlands and Ontario. Some of the ones in Redlands have simply changed over to used car dealerships. But it may be time to change our thinking about having to have 2000 to 4000 pounds of equipment surrounding us as individuals on a everyday commute.
  • gagricegagrice Member Posts: 31,450
    We moved from Santee that is very congested and the closest decent shopping for us. It has the closest Costco to our home in Alpine. No car dealerships new or used in Santee. Closest car dealers are all in El Cajon.

    El Cajon Ford has to be close to folding. They laid off 8 mechanics. One is a friend that had been there 17 years. We looked at homes up your way around Murrieta. Thought about Idyllwild then figured it was too far out.

    I don't see the bailout doing the dealerships any good at all. Or the people that have lost their jobs working at the dealers.
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