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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)
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
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
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)
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.
"STATE COLLEGE — Declining sales and revenue have forced one local car dealership to file for Chapter 11 bankruptcy."
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.
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)
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)
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.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
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.
THOSE dealers must be happy.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
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?
http://www.philly.com/philly/hp/news_update/20081210_Agonies_trickle_down.html
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)
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?
I plan to get an Acura TSX. $355 a month lease. Not bad!
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)
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
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2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
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.
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.