Are we all payphone salesmen ????

[btk]

I cant help but think that when cellphones came out in the 80's, somewhere in this country there was a convention of pay phone sales people talking about their future and how many preicted the end of pay phones. Are we doing the same????
In all my years in the business I can say with confidence that I think dealerships in general whether good or bad are seeing the end of days. In my lifetime, maybe 20-30 years from now I think dealerships will be gone, cars will be sold direct from the manufacturer, maybe though Walmart, Costco, Maybe direct online. Order car on Monday see it delivered on Thursday. Service -warranty will be done at local independant garages with direct agreement through the manufacturer to provide warranty repairs and purchase of parts. Each independant garage will have exclusive territories and can loose the franchise if certain performance measurements arent met.

I thought, not too long ago, that we were saturated with dealers and this would be a good thing for those left standing. I am strongly starting to think that opening an independant garage may be a better way to go. With the splintering of all these franchises, Chrysler owned by Italy, China owning Hummer and whatever comes next, how long before someone puts our end into motion.

Sorry guys,gals
just had to throw my two cents in and see if anyone else sees the same writing on the wall.

[texaslp]

How will Costco handle trade-ins?
Financing?
What about special tools?

I'm sure others will chime in with other items.

Your analogy doesn't really compare. Cell phones were a more efficient, convenient product than pay phones.

[franks283]

I am with you. Seems to me a good gauge is going to be the dealers that went from selling ChryslerJeepDodge's to being used car dealers. Will they thrive? I know there are a lot of factors, but suppose you own your property? Losing the franchise means cutting jobs(salesmen, partsmen, service personnel), losing new car sales, parts sales, etc. But if you have a strong customer pay base for service, and a good used car staff, you might do ok. Retain the good employees, and elimate the weak. Darwinism. It is going to be interesting. And, I too see the dealership body, as it exists today, going to something else. Costco already does have it's foot in the door with buyer services, as does the Automobile Club. So, with time we will see.

[gully]

Well I did see in the news Walmart is adding 22,000 jobs lol...

[KevvyG]

20 or 30 years from now......wondering if your dealer is still going to be around is going to be the LEAST of your worries.....

[gmcgrew]

Servicing of cars is already done by independent service facilities. They are called dealerships. If they try to open up a town to service facilities besides dealerships for service work they will have to allow all facilities to provide that work. Just think about the insurance companies and body shops. The exclusive contract with the manufacturer benifits the manufacturer so I can not see it changing. Besides if they didn't have dealers they couldn't raise funds whenever they wanted by shipping a new essential item and charging the dealers for it.

[fixed-op emperor]

Strong CSI dealers with a large base of service customers will survive selling used cars. You might argue that the strong CSI dealers are the ones that kept their franchises but there is a reason for that.
Did someone mention Darwinism?

[This message has been edited by fixed-op emperor (edited 06-05-2009).]

[topshop1]

I tend to think that the "typical" dealership will change significantly more than it will vanish.

Maybe the following example already exists, but I am not aware of it around here.

A dealership that is fully integrated with a mall where the new car showroom is an anchor store. I would think that the increase in traffic in the showroom could be massive.

As far as the dealers losing their franchises turning into used car dealers with a service department, I do not see the odds of great success being very high. Sure, there are a few (probably small town dealers) who can make it work. But, I suspect that it simply will be too difficult of a transition for most...mainly because an indepent repair shop is a vastly different animal than a dealer service department.



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Tom Ham
AutomotiveManagementNetwork.com

[Tyler Robbins]

I have seen several of the "Mall" Dealer Showrooms, and unfortunately past demonstrations that I am aware of have proved to be a bust. I think that customers who go to the mall, are going because of the mall, not because there is a car dealer there, and the traffic that wanders into those Showrooms is just that, wandering in, having a look and wandering back out not so much that it was the destination for car shopping.

I think with dealerships closing and the remaining dealers naturally getting a boost in their business (due to the lack of competition) that UNFORTUNATELY, very little fundamental changes in the way cars are sold will occur.

The remaining dealers will simply go back to what they have always done, and with more sales per location almost inevitable, it will only solidify the antiquated sales processes that already exist!

From a Fixed Operations perspective, I was convinced about 15 years ago that it was only a matter of time before "Manufacturer X Approved Facilities" starting popping up. In other words, various aftermarkets being "approved" by Manufacturers to perform warranty services. Think about it from a manufacturers perspective - assume one of the major aftermarket chains wanted to become approved - the manufacturer now can force 3000 locations (or however many) across the nation to purchase the "authorized facility franchise fee", purchase the naturally overpriced "special tools", invest in manufacturer marked up "technician training" and almost instantly gain huge increases in more and more parts sales, etc from that many more service facilities!

Realistically, 90% of customers who defected from the dealerships have landed at an aftermarket and if the manufacturer was genuinely interested in selling more parts, etc - what better way than to give your competition "approval" status!

It hasnt happened yet, obviously, but who knows what is to come of our industry in the coming years!