Interesting: The personal views of two Daimler Chrysler People...
Folks, I asked the father-in-law of my best friend to comment on CBLT. George is retired from Chrslyer. His son works at the Chrysler Tech Center in Auburn Heights, MI (about 3 miles from my house), he added some comments too. Here are their views of CBLT. Although I am long CBLT, I appreciate their candor. Here goes:
<<<I wanted to talk to Danny about CBLT before I responded. He is right in the middle of this at DCX and aware of industry initiatives to direct sell on the internet cars, parts, and aftermarket items. He has seen your memo and
we feel you have captured the issues very well. The following comments may be helpful from a perspective standpoint.
NEW CAR SALES - All of the Auto's fully expect to sell new and used cars on the internet for delivery through the existing dealer network or through Metro delivery centers. They now have systems in place and web sites that
allow customers get product info and soon firm prices on their selection. They expect the Syms suit to become largely a resource person. In fact, in some dealerships the price comes off the computer and their is no negotiation by the sales people.
The Auto's are experimenting with format and investing heavily in marketing systems. They provide their dealers training, web site services, Area inventory management , satellite capabilities, etc. Dealers are under great
franchise pressure to use the company programs.
PARTS & AFTERMARKET - This is more complex. Dealers must use company approved parts in their service and repair activities to avoid negating vehicle warranty. Dealers also sell parts in their local market. This is all high margin stuff for both the company and the dealer. In fact, few
years Chrysler's profit was from parts and not new car sales.
On the other hand, there is already in place a huge independent parts industry with sales outlets in nearly every city and town in the US. I would expect the auto's, the parts manufacturers and the independents to circle the wagons soon on this activity. However, 9 million hits is
impressive.
OVERALL - Both Dan and I are skeptical CBLT can be more than a niche player over time. It would be great if one knew how big the niche will be...
GEO.>>>>
OK, here we have a somewhat (only somewhat!) bearish outlook from two industry insiders. Danny, by the way, is a higher
up in the Dealer Relations Department of DCX. So, how big is the non-Big 3 niche?
DocStone |
