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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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Some got wiped out, like a bunch of off-topic posts. Please stick to the topic or you may find your participation in here restricted. Vegas is hurting and the foreclosures are spilling over to car sales: Centennial Hyundai closes six months after opening (LVRJ) |
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The first is a huge dealer group in Wisconsin, but the news is he is closing only his Saturn stores. I guess he's getting out while the getting is good, since GM announced it will be shutting down the brand. All the dealerships he is closing will be gone by April 15th. Too many of these, and the Saturn retail group won't be able to find a way forward from 2011. Apparently this one is one of the original Saturn retailers: http://www.examiner.com/a-1907575~Bergstrom_closing_Saturn_dealerships.html?cid=- rss-Wisconsin_Headlines The other is a large Dodge dealer in New Mexico. This one is in hot water because he stopped paying off peoples' trade-ins when he knew the end was getting near: Ken Zangara lands in a legal stew New Mexico says high-profile dealer misused funds March 30, 2009 - 12:01 am ET Ken Zangara is in hot water. The well-connected New Mexico Dodge dealer closed his store last month because of collapsing sales. He now faces a state civil action stemming from what New Mexico Attorney General Gary King described in a court filing last week as "an automotive Ponzi scheme." An action filed last week in a New Mexico district court alleges that the Albuquerque store took numerous vehicles on trade that had loan balances due but failed to follow through on a promise to pay off the loans. Zangara Dodge "misrepresented that the check to the creditor is in the mail when it is not," the court filing states. ....The allegations are the newest chapter in the saga of a dealership that for many years was the top-selling Dodge store in New Mexico. Zangara twice chaired George W. Bush's New Mexico presidential finance committee and once chaired Dodge's national dealer council. When the automaker was seeking a bailout in November and December, he used his influence to help Chrysler dealers get audiences with politicians. Zangara Dodge closed Feb. 17. The 56-year-old dealer said his financial troubles began when sales declined sharply last fall. In an Automotive News article last week, Zangara blamed his store's closure on Chrysler Financial. He said the captive pulled his floorplan and stopped buying his consumer loans in February. Attorney General King alleged Zangara Dodge fraudulently diverted customer payments to pay other bills. According to the court filings, the money should have been used to pay off the trade-ins and pay license registration fees, insurers and extended service contract providers. A spokeswoman for Zangara's lawyer, Allan Wainwright of Albuquerque, said the dealership could not pay the fees and trade-ins because Chrysler Financial had frozen its accounts. Chrysler Financial declined comment. "Zangara knew he was in trouble," Branch said. "He continued to take trade-ins and then was using the money (from sale of the vehicle) to pay off the trade-ins for other obligations." http://www.autonews.com/article/20090330/ANA06/903300324/1142 (registration link) It seems to me that this is just one more example of how, as more and more dealers get in trouble, the desperate measures they take to try and stay afloat have larger ramifications on their communities. I know lots of folks here are against dealers getting any sort of federal help, but gee whiz: we bailed out every other part of the auto industry supply system! And the failure of this portion of it is hurting lots of people. Of course, on the flip side, if we give them a bunch of help and then GM and Chrysler go out of business anyway, it will end up looking like wasted money I guess. |
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Put cars in Walmart and Price Club with a price to the public. The same low price to everyone just like everything else in the store. Slow sales...lower the price! Extremely slow sales, blue light special. I don't need a dealership who pays a salesperson to get me to pay more for an overstocked overpriced commodity.
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Replying to: mako1a (Apr 02, 2009 7:49 am) |
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| Manufacturers put model years on their own product essentially labeling them with an expiration date. Obviously some form of year is needed for value, insurance etc, but it also makes them devalue when not sold quickly. Just a thought...Kubota makes tractors, but doesn't put a model year on them until they sell. Sale date becomes model year. | |
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Replying to: euphonium (Apr 02, 2009 7:57 am) But do we want all dealerships to go away? They are the only vendors of CPO cars. They are the only providers of warranty work on new cars (not sure how the WalMart proposal for Chinese cars is going to work for warranty work - will they set up mechanics' shops at WalMart stores?). They are much more numerous than WalMart stores, so the number of different things they support in their communities is much higher, and the types more diverse. The dealership pay scale is much better, and full-time employment is much more prevalent than at WalMart, so dealerships provide better job opportunities for their communities too. These are good businesses to have in general, even the corporate giants, and let's not forget what a high percentage are small family businesses. No way the average family is going to be able to find the capital to open up a WalMart.  Edit...since domestic-branded dealers are taking the brunt of this, let's make this real: you really think there is a potential in future for buying Fords, Chevys, and Dodges at department stores? I can't see these automakers going for this even if they lose a large portion of their dealer networks. |
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Replying to: nippononly (Apr 02, 2009 8:36 am) "Former New Orleans Saints running back Deuce McAllister has temporarily closed most of his south Jackson car dealership to determine the future of the enterprise. And time is short. "We are trying to work through and figure out what is the best solution for this whole process," McAllister said Wednesday at Deuce McAllister Nissan of Jackson. Nissan Motor Acceptance Corp., the automaker's financing arm, filed a civil suit in February alleging Deuce McAllister Nissan owes nearly $7 million - with about $5.7 million listed as vehicles on the lot, court documents show. The dealership filed for bankruptcy in March to reorganize and halt Nissan's efforts to repossess the vehicles." McAllister's dealership's future in doubt (ClarionLedger) |
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Replying to: nippononly (Apr 02, 2009 8:36 am) |
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