Years ago, GM tried to consolidate dealers by forcing them to sell to Rider, which only had 75 dealers. When new england had 900 dealers, GM had 60% of the market share. Now they only have 30% market share. So, dealers must be dwindled to 450.
The dealership secret is location, location, location. Wrong locations, have to spend $50,000 dollar newspaper quarter page advertizing with lost leaders to get customers to drive in.
Some locations have more traffic without any advertizing at all.
So, GM has to allow successful dealers to pick another location to double their dealerships in 2007.
Banks are now flush with cash deposits, that some will do dealership financing. In the old days, each dealer can start with $5 million financing for 500 car lot. Today, you have to triple the financing to $15 million per dealership.
It is not difficult if you know the low down of auto dealership on location, financing, and salesmanship. Salesmanship is knowing the whole family you deal with. Cutting a good deal for the father, or making buying a car a good experience for the whole family. Knowing the dealer used to be an important event in the family. Many 500 car per year salesman depended on the whole family buying from the same dealer. The richest Chevy salesman who lived next to Ford chairman, sold 1500 cars a year in Detroit. He has three subordinates working for him to achieve the results.
I used to talk to GM top executives, when they visited Boston(Framingham buick-oldsmobile assembly plant). You now know the auto business as it was run in its hay days.. |
