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It seems like the independent dealers are becoming a thing of the past, with pretty much everything being owned by one or two huge dealer groups. I'm not a big fan of this. If you have problems with a dealer, where do you go when they own everything?
Two recent examples in my local area:
Quote:
A Dunn staple is changing hands.
Crossroads Automotive Group recently purchased Dunn-Benson Ford, marking the first time in decades that a member of the Lamm family will not be overseeing the local dealership.
He knew that his dealership, Davis Chevrolet Buick GMC, located at 96 Radio Drive, needed a step up — a larger group to take the company to the next level.
“This business is getting very complicated,” Davis said. “You probably need an advertising department, a computer department and a human resources department and a compliance department. You need someone with more infrastructure and ability to handle that.
According to Davis, the dealership is 98 and a half years old. It was started by his great-grandfather in January 1921. The business was passed to his grandfather and then his father. Davis took over the business in 1999 when it was time for his father to retire.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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We have several dealerships that are part of the huge Autonation group, but we still do have many other family-owned dealerships. I would stay that family owned are still the majority here. The dealer we use (last 3 purchases) is family owned since 1934.
The industry is consolidating. One ownership group here in SoMD now owns most of the Ford and Dodge dealerships as well as some Toyota, Honda and Subaru ones in the region.
Keep in mind that both GM and Ford went through a period of shedding dealers several years ago because corporate thought there were too many.
Yes, the same thing has been happening in my region for a number of years. One-by-one, the independent family-owned dealerships have been getting gobbled up by one of the local/regional mega automotive groups, who in nearly every case, started out many years ago as a local independent family dealership. We do have a Carmax, but they only sell used cars.
So now it is just these few automotive groups that control probably 95% of the new-vehicle dealers in the local market. Seems almost like a cartel.
Yes, the same thing has been happening in my region for a number of years. One-by-one, the independent family-owned dealerships have been getting gobbled up by one of the local/regional mega automotive groups, who in nearly every case, started out many years ago as a local independent family dealership. We do have a Carmax, but they only sell used cars.
So now it is just these few automotive groups that control probably 95% of the new-vehicle dealers in the local market. Seems almost like a cartel.
I think it's that way in a lot of local businesses from restaurants to farming to new cars. The business is started and stays in the family for a generation or two but the latest generation doesn't want to do it for whatever reason.
What's new? Everything is being consolidated and bought out. How it is escaping anti monopoly laws, beats me, but points how powerful are people behind that.
All been owned by few families anyway, as he who pays, he owns the orchestra.
A bit outdated, but points in the right directions
Your post has the answer right in it and you put it in bold:
“This business is getting very complicated,” Davis said. “You probably need an advertising department, a computer department and a human resources department and a compliance department. You need someone with more infrastructure and ability to handle that."
The internet has made marking up cars a more complicated process. Now they have to do fake add ons to pad their profits. But still I have to believe their profits are getting hurt by the online thing. Or not... most people seem incompetent when it comes to buying new cars.
The internet has made marking up cars a more complicated process. Now they have to do fake add ons to pad their profits. But still I have to believe their profits are getting hurt by the online thing. Or not... most people seem incompetent when it comes to buying new cars.
Yeah, I think the internet has definitely had an effect.
Many dealers also do add-ons to their inventory before they are put out on the lot for sale, like window tinting, an alarm that makes the horn honk and the light flash, nitrogen in the tires, paint & fabric protection, etc. Those add-ons carry massive markups on the added dealer window stickers. Even when they agree to negotiate the prices on that stuff to just a fraction of what they were asking, they'll push other things like extended warranties and pre-paid service agreements when you get to the finance person.
Another thing I think has put the squeeze on dealers is the reduction in the number of build configurations on most vehicles. Dealers are likely to all have mostly the same vehicles with the same packages and colors as their competitors, so it makes it easier for buyers to play one dealer against another, when competing dealers have identical-configured same model vehicles on their lots.
Dealers have always, at least in the almost 50 years I've been buying cars, do add-ons. Maybe they were more subtle but they did them.
Pinstripes, undercoating, fabric protection, audio upgrade (from AM to AM/FM), paint protection, they've always been pushing them. Maybe not extended warranties, those are relatively new. But some of the things you guys mention have been out there for decades.
One I forgot for the then "mid-size luxury coupes" (Monte Carlo/Cutlass Supreme/Grand Prix/Regal/Thunderbird/Cordoba) was a lift out sun roof.
EDIT: Another one I forgot that I had never seen until I moved to the DC area was ADM or Additional Dealer Markup. That was on top of the sticker. You didn't get anything for it, it just "was".
Last edited by North Beach Person; 09-27-2019 at 05:21 PM..
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