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Automotive News & Views Dude, where did all the dealerships go?
654 messages, Last post on Nov 23, 2009 at 7:56 PM
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Replying to: nippononly (Jan 06, 2009 9:57 pm) Most projections I have read believe it will be upwards of $90 billion. And yes those are all NOWHERE in my book. Especially SF that is due to chip off into the ocean any day now.  San Diego does not seem to be as devastated by the downturn. San Diego car dealers are experiencing their worst downturn in 30 years or longer. New car and truck sales in the county in 2008 will be 17 percent lower than last year, according to a report released this week by the San Diego New Car Dealers Association. Sales have dropped 33 percent since the peak of the market in 2004. Some auto dealers see parallels between today's market and the 1970s, when the industry was hit by oil shocks, stagflation, sky-high interest rates and a sharp shift in consumer preferences favoring fuel-efficient vehicles instead of the luxury-sized boats that made up the bulk of the market. We've been in business for 60 years and we've had some tough times especially during the energy crises in the 1970s, when interest rates were getting close to 21 percent, said Tony McCune, who owns McCune Chrysler Dodge Jeep in National City and Chula Vista. Those were horrible days and we pulled through, so we'll pull through this one. We just have to battle through the crisis. New owners at my Toyota dealer, no closings that I can find. San Diego is more conservative than the rest of the state. Though we have had our share of foreclosures. |
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| Not exactly in the same boat, but around a year ago the Caddy dealer nearest to me lost the lease on the land it has occupied for maybe 35 years, and had to move. It is now located adjacent to a Hummer dealer on an auto row. The old site was to be developed into retail and condos I assume - that is, before the commercial real estate market puked, and now the old building is sitting there vacant, kind of like an old ghost. It is a very 70s looking building, with a rambling service wing, a main showroom with large period windows, and a tile roof - kind of that faux Mediterranean look popular at the time. The old signs are still up, and there is even an Oldsmobile sign. It's kind of sad to see it - when the building was still occupied it was almost kind of cool to see it in that out of style building. | |
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Looks like another one bites the dust. I received an email today, from the dealership group where I bought my Intrepid, Dad bought his used '03 Regal, and my uncle bought his '97 Silverado. And one of my friends bought his Xterra from Sheehy Nissan. Now that I think about it, my Mom bought her '86 Monte Carlo from this dealer too, although it was called something else back then. We Appreciated Your Business Over the Many Years Dear Valued Client, This email is to inform you that due to current business conditions, Sheehy Chevrolet will be closing it's doors February 2nd. In the meantime, Sheehy must clear it's lot of all remaining Chevrolets and have priced new vehicles up to 50% off the original MSRP! Sheehy will still provide you with the same quality of financing you've come to know over the years. All factory warranties will be honored at any other Chevrolet dealership. Please contact me if you have questions regarding warranties, financing, units for sale, or anything else regarding the store closing. Please contact me as soon as possible. Respectfully, Mike Nikolich General Manager This particular dealership sold Dodges, Chevies, and Isuzus back when I bought my Intrepid. Isuzu went away soon after. For some reason, it seemed like the Dodge side of the business kept expanding, while Chevy was shrinking. I wonder how much longer the Dodge showroom will be open?
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Replying to: andre1969 (Jan 28, 2009 8:06 am) Now, will there still BE a Dodge brand for them to sell in two years? If so, which I think is legitimately in doubt, it will probably be a VERY different lineup of vehicles (sourced from VERY different places!) than it is today. In my extremely informal straw poll, it seems to me that Chevy dealers are suffering the most, although Buick-Pontiac-GMC dealers are not far behind. I think that's because of the squeeze GMAC has been putting on them for a few months now.
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Replying to: nippononly (Jan 28, 2009 9:52 am)
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Replying to: andre1969 (Jan 28, 2009 10:02 am) |
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the head of NADA said yesterday that just under 1000 dealerships went out of business in the U.S. in 2008, costing around 50,000 people their jobs, and they expect close to 1200 dealerships to close in 2009. 
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Replying to: nippononly (Jan 28, 2009 9:21 pm) |
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the final number is 936 dealers out of business in 2008. It's a hard business to be in these days: Hard times have dealers crying: Cut! As vehicle sales and dealership profitability remain depressed, dealers say they are trimming every expense that doesn't directly generate income. From employee health insurance to showroom thermostat settings to season tickets to the local NFL team's games, they insist, nothing is off limits. I am of two minds here - some of the things mentioned being cut (like season sports tickets and company boxes) are pure luxuries, others like employee health insurance are not: Belt-tightening 101 These are some of the ways dealers say they are cutting costs. Reducing or eliminating their own salaries and those of other top managers Deferring maintenance and capital improvements Shortening operating hours Requiring employees to pay a larger share of health insurance costs Eliminating the company match for employee 401(k) retirement plans Reducing spending on employee training, uniforms, company cars and travel Assigning employees to do work formerly done by outside contractors, such as janitorial and lawn care services Suspending charitable contributions Combining central office functions of several dealerships http://www.autonews.com/article/20090126/ANA06/901260373/1114 (registration link) It also mentions some dealers buying only quick-turning new models for their lots, rather than ones that might take longer. Of course, the manufacturers are taking widely varying stances with response to that type of system right now. While Ford and Chrysler are taking the attitude that they can be patient until things turn around, GM is pushing dealers out of business at an increased rate. It will now begin penalizing them more (via GMAC) for older new cars that have been on their lot for a long period of time. If I were thinking of opening a business today, this wouldn't be the type.
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Replying to: nippononly (Jan 30, 2009 8:03 am) |
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