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02-05-2012, 01:27 PM #1
How to loosen the grip of dealerships or get rid of them completely when ordering a
How to loosen the grip of dealerships or get rid of them completely when ordering a new truck?
If my memory serves me correctly back in the early days of the automobile industry, there was some national bill past to protect consumers when buy cars that made it legal to create dealerships for the sale of new cards, trucks, etc.
Times have changed and it would be nice to cut out the middleman and the bloat the comes with it and offer a way to buy direct saving the consumer all the crap that you go through with the dealer and getting the car or truck at maybe 40% lower then what a dealer sticker cost is.
The reason I am asking this is, a local news station looked into what the actual cost of say an Eddie Bauer edition ford expedition was about 5 years ago and they found that:
After ford paid for the materials, the labor, the benifits for the employe's etc and made about a 25% profit margin on that SUV, it cost ford out of pocket $20k. Then walks in the dealership and the cost goes to $55-65k.
Thats a little hard to digest.
I should be able to place a order on GM's web site buy direct from GM and save that 30k and not have to deal with the pain and suffering of dealing with the (I can't say it) somethings at the dealership.
I mean we don't live in the 1930's anymore.
I should be able to purchase a brand new fully loaded 1500 LTZ for maybe $12k from GM with out the dealership and Maybe $25k for a fully loaded LTZ 3500 dually and that gives GM an additional $3-5k over their cost after their expenses are figured in.
02-05-2012, 04:08 PM #2
But change like that would cost people their jobs...
Seriously, I agree with you. The core of the problem is likely the distribution model. As I understand it the cars on a large dealership's lot are basically there on consignment ... with the dealer incurring a cost it must pay to the manufacturer every day a car from that manufacturer sits on its lot. If that's accurate it means GM gets paid whether a car sits or sells ... and it's in the best interest of the dealer to sell a car as rapidly as possible. It ALSO means the manufacturer has one place to which it must ship/deliver a large volume of vehicles ... to serve hundreds if not thousands of buyers.
If GM had to ship a vehicle directly to your home when you ordered it online it'd cost GM more than it does to truck a bunch of cars to a dealership -- as it'd be more people trucking things around and more fuel burnt using more vehicles. Likewise, if GM had to maintain a bunch of large lots (strategically placed across the country) to which you would travel to pick up what you had ordered, it would now need to pay for the space, security, lighting, people, etc. at such lots AND it would not collect whatever consignment monies it receives from dealerships, today.
Can you suggest a model that not only lowers our cost ... but also GM's? That might get their attention...
Last edited by SurrealOne; 02-05-2012 at 04:41 PM.
02-05-2012, 04:35 PM #3
This would be an excellent question posed to a group of business students at a University or two. Maybe a contest similar to the alternative fuel contests.
The dealer though will always tell you he isn't making money on the sale of new vehicles , only used. Yup believe that one and I have ocean front property to sell you in Denver.
Of course the delivery system could and should be based on regional delivery with full trucks/trains leaving th manufacturer.
When you look at your sticker you wil see a 800 dollar delivery/ transportation feee already included. So it should cost no more than what you already pay.
As far as delivery to dealerships, here in Salt Lake City if you ordered something not on the lot it takes 6-8 weeks for delivery then the dealership has to drive over to the rail yard and drive your vehicle back. So it seems the simplicity to picking it up at the rail yard by the consumer would be jsut as efficient.
All very good questions and remarks , It should open a forum of all manufacturers to ease the burden on the end user.2010 Chevy Silverado Z71 ext cab.4x4
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02-05-2012, 04:59 PM #4
I think there is some law on the old school books from back in the day that lets them operate and we need to start flooding the sentors and congressmen to revoke that law or bill or what ever it was and push the manufactures to sell direct now. Right now I think it is legally not possible even if we could get them to agree to it.
02-05-2012, 05:04 PM #5
Nak, Just for you i will write my congressman today and ask the hard question and see if he can enlighten a dark soul like me.
02-05-2012, 05:22 PM #6
If you really do, thanks Coach that is the only way to get change done...... I need to find out the name of the bill or amendment or law that they passed authorizing dealerships to operate so they know exactly what we are talking about.
02-05-2012, 05:24 PM #7
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In this current economy, do you really want to see all dealerships go out of business??? Thinks of the Hundreds of Thousands of jobs that would be lost. 2nd where would you take your vehicle for warranty work? I know in the small sceme of things its seems like a simple solution, but there is alot more involved with the dealerships besides just selling you the cars or trucks. I know the parts counters supply numerous body shops with parts just because they aren't available through aftermarket distribution on newer model vehicles. In the grand sceme of the things it would ultimately hurt GM and us as consumers!!!!
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02-05-2012, 05:27 PM #8
I don't think as many jobs would be lost as you think. I guess it would depend on the dealership. Were I live, Rick Henndrick's is the biggest dealership and I am sure at this point there auto sales is smaller than the amount that they get from Nascar, etc and other things they do. Smaller dealerships don't have stuff like that to fall back on. but it goes to show that they are really over pricing cars and screwing people.
02-05-2012, 06:35 PM #9
As a former Ac/Delco distributor as well as GM products the direct sale will result in added jobs as well as profit for the company.
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