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Pastimes : Car Nut Corner: All About Cars

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To: kidl who wrote (4356)	11/17/2023 9:15:26 AM
From: robert b furman	3 Recommendations Recommended By longz roguedolphin toccodolce Read Replies (1) of 5673

Saavy dealers have been selling cars over the internet for years. Especially the used vehicle market. There is a legal issue that requires DEALERS TO DO IT VS. OEM's IN MOST STATES. The really good internet operations won't shared the cut throat margins with Amazon. They left Auto Trader and newspaper long ago. My bet is only the small dealers would pay Amazon for the leads. Direct to customer has been learned by smart dealers long ago. That does not mean there are not a lot of dealers than still DO NOT have a clue on how to market autos on the internet. The internet is the great equalizer. It has significantly whittled down the average gross profit on both new and used. One big Caveat on that has been the pandemic. The shortage of production has force fed both the dealers and OEM's to expand the margins required to keep the franchise system alive. Supply chain disturbances have been a well oiled excuse for greater margins for the dealers and smaller to zero rebates on hot products. It also has been justification to reduce poor selling models completely from the product lines. It has surprised me that OEM managements have not reverted back to the product push model that endorses loading up dealer inventories and high floor plan bills for the dealers. They learned by the pandemic what dealers were trying to tell Detroit execs for years. How long it lasts? has surprised me. I have expected greed to revert back to the dumb business model of the past. With the push for EV's, the OEM's have pushed a lot of DEALERS OUT OF THEIR INVESTMENTS. Cadillac bought back their franchises on almost 33% of their dealer body when they declared they would be all electric by the 2025 model year. That has been the canary in the coal mine for me. With EV sales slowing, Cadillac will take a U-turn on all electric and have a much reduced dealer body count. The 2025 model year will be upon us in only one year. If Cadillac continues on that road, they give a lot of their owner base over to Ford/Lincoln dealer body. I suspect huge pivots in the EV electrification transitions. The OEMS will defer and in the end have huge writedowns (and management early retirements for those who overdid the woke politics vs.a disciplined awareness of demand strength/weaknesses in different geographic markets). Read that urban vs rural and hot climates vs cold. GM is now doing doing the same insanity with Buick. It inadvertently makes all the dealers urban dealers. Rural wealthy people like to do business with a local dealer. If GM leaves that rural markets, they stay local with Ford/Lincoln. No one can afford to lose the luxury car market. "ALL EV" will do that IMO. Bob

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