Why GM and Chrysler want fewer dealers

Discussion in 'The Coffee Shop ~ Chit Chat' started by ChevyFan, Jun 9, 2009.

  1. ChevyFan

    ChevyFan The Sheriff Staff Member 5+ Years 1000 Posts

    Here are some questions and answers about why GM and Chrysler are ending their franchise agreements with so many dealers.

  2. hunky

    hunky Rockstar 100 Posts

    I can't see how closing dealerships will save the kind of money they need. I would think the more dealers the better for the customer. It's been my experiance that the bigger the dealer the crappier the service,the customer is just a number. "struggling" dealers will fade away on their own, thinning the herd.
  3. 08victoryredZ71

    08victoryredZ71 Rockstar

    X2 they said that it dont hurt GM or chrysler to have those dealers open. So why close them and kill off jobs? Dumb if you ask me!
  4. detailjohn

    detailjohn Rockstar 100 Posts

    Think of it this way. If they can close dealerships without any revolt/or consumer backlash, then they can close anything that the feel unnessasary...
    It's just the beginning... Maybe they make certain fast food places close up...

    It's coming.... increase tax on beer, soda, gas, etc....

  5. Browntowns20s

    Browntowns20s Rockstar

    here's the inside scoop. right now i work at a Gm -chrysler- mazda dealership. here's how they chose who to close and who to keep open. All dealerships are rated on their CSI scores (customer satisfaction index) and their volume of sales. THe whole goal of the dealerships closing was to make fewer quality dealerships. A big compiant within the dealership world was in certain ares (mostly metropolitan areas) there would be 4 Gm or chrysler dealerships withing a very small radius. this is what caused the dealerships to be so cutthroat because they had to make volume to keep the doors open. AS unfortunate as it sounds both GM and Chrysler had to take a step back and look at Toyota's sales strategy. Toyota has a little more then half the volume of GM dealerships yet has more sales. Why is this, THey have a few quality dealerships with great csi scores pushing only Toyota products. Through this recent downfall of dealerships i have been fortunate to be at a place that has come out on top. We had only had jeep, and our next door competitors had dodge and chrysler, well because we took care of the customers and the corporation our neighbors got the ax and we got their product line. the stipulation was we had to make one location solely chrysler jeep dodge and we have to remodel to suit their liking--- going with the toyota theme, one product, one facility, many happy customers. Will this plan work? i dont know, we came out on top this time but who knows what the future holds
  6. Hummer

    Hummer Rockstar

    Interesting about the CSI being the weight that tips the scales of who gets to stay and who goes.

    I heard a story the other day that dealers "bought" the franchise. Thusly it seems they do have a case in court if they get cut off as they say they are.

    If I were on a jury and such a case went down I would have to side with the poor guy that bought he franchise.
  7. Dan

    Dan Rockstar 100 Posts

    i am a retired car/truck/motorcycle dealer and i hate to disagree but you close dealers the competion goes down less discounts to sell so dealers make bigger $$...the manufacture does not have to give rebates to sell there units so bigger $$ for them...being that the new are selling higher your used car is worth more $$ on trade or private sale...so when you come down to it it is realy a win win for all...were i do disagree the us auto buyers do not realy want small cars except to save $$ to and from work most will still want the suburbans trucks and so for there family cars i personaly would never buy a small car for everyday use

  8. Bikeman

    Bikeman Member

    Your totally right, they had contracts for the franchises but when GM and Chrysler filed for bankruptcy that made it possible to break those contracts. Yeah I don't get the closing of the dealers since they are not owned by the manufacturer. I guess they are trying to create demand.
  9. hunky

    hunky Rockstar 100 Posts

    I am told that it cost GM $800,000.00 each to close an Oldsmobile franchise a year or so ago. Bankruptcy saves them a big chunk of money. When you get the goverment and lawyers involved in the car business,success is impossible IMO. Grab your ankles boys and start buyin' your vaseline in 55 gal. drums cause you know whos gonna' pay. They will create demand for small cars by keeping the price of gas at $4.00+ per gallon for starters.

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