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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (1916)	2/13/2019 6:41:18 AM
From: robert b furman	1 Recommendation Recommended By elmatador Read Replies (1) \| Respond to of 13803

Hi El, I've been out of the management of dealerships almost 10 years now. The OEM's have reduced margins in new cars and parts. They have continued their dictatorial demands that have greatly changed the market in total. There will be a reduction of dealer points and this has been ongoing for well over 30-40 years. In the past the dealer points that diminished where rural and generally smal points that had no demographic growth. I suspect that future attrition will be more focussed on the urban points. The young (no ownership of a car) will be an ongoing phenom , but (many will have a car as they move out to urban areas as they have children and want better than inner city schools. A bigger impact (IMO)will be the franchising of autonomous vehicles by the OEM's. It is my suspicion that the Waymo's and Cruz's of the future will be selling direct to the users (Lyft and Ubers of the future). Rental companies will be buying direct as well. The high volume well capitailized dealers in high growth and wealthy markets will survive along with the publicly owned stores (autonations of the world). This evolution has been ongoing and I think it will be much slower than what many guru's predict. I think (hope), I'll be out of the car business completely in 5 years - 10 years would surprise me. I'm so glad I got to work for GM for 16years. During that time I realized the evolution of viable points vs those destinned to being shuttered. Fortunately for me, my retail opportunities took me to a suburb of Houston that currently is experiencing very fast growth of the suburban development. Life requires a long term view and flexibility. It is often not embraced - but inevitable. Good article and it appears the historically small dealer body of Europe and England are being weeded out. Those markets have tiny dealers and very small inventories and annual new unit sales. Even in the US, a long term survival strategy is to have an excellent service, parts, body shop, and used vehicle operation. With the scuttling of most new small sedan models - the first time buyer has to (more often than not) consider a used vehice for their first purchase. NADA has for decades told dealers to shoot for 100% fixed absorption by those departments. That leaves the new car operation as just the frosting of profits for the swings of the New Vehicle Dept. Less than 5-10% of the dealers out there ever reach that hallowed ground. I got my store to 95 % - primarily through a very strong body shop (which sells a lot of parts) and used vehicle operation (which supports the service dept and parts through reconditioning efforts). Bob