would the big auto makers make money if they went 100% internet selling?

[javadog]

What keeps the whole system ticking is the huge cost it would take to buy out all of the existing dealer network for any manufacturer.

[911boost]

The manufacturers can barely manage the inventory as it rolls off the production line. They use a 3rd party for that.

And before you disagree Spunk, I work in the industry and have seen it first hand.

[aschen]

I have no problem with having dealers, but legislating them a monopoly is the problem. Seems like a good place to let the free market speak. There are plenty of products sold in mixed chains. Order online if you like, go to a dealer if you like.

If you legislate any of the market freedom away it should be the right to repair. We are about a week away from cupholders and wiper blades having proprietary firmware, and I have no problem forcing manufactures to make parts and tools available for independent or home repair.

[cockerpunk]

Originally Posted by javadog

They could, in theory. Do you think they would do that for free, or you think that would add to their cost, which they would then pass on to you?

Can you name the famous manufacturer that thought about doing that, decades ago, in the US? Tell us how that went.

That law that you speak of that protects dealerships. Is that a federal law? A state law? The local ordinance? Or is it a figment of your ignorance? Show us a citation for that.

as already detailed, and studied, the manufacturer would be able to to do is cheaper, and without a third party profit motive.

there is currently an automaker, who is pretty famous, who is doing it right now.



already stated, in most states there is a state law protecting car dealerships. this is not that uncommon, booze and beer distribution is protected in a similar way.

[javadog]

Show us that study were these manufacturers could do away with existing dealer networks and distribute cars I’m selves at less cost. You keep saying there is one, obviously you’ve read it and it shouldn’t be hard for you to produce.

[stealthn]

I think it’s what you make of it, I’ve only ever bought 1 new car (Dodge Ram 1500), I went into the dealership, drove one, told them all the options I wanted and let me know when they have one (I was in no rush). Got a call a few weeks later they had one with a little more options than I wanted, so went to look at it, they gave me their best price, I told them I will only pay 3% over their cost, to which the sales manager said they’re best price was better than that, I said show me your cost which he did, the 3% was $9500 cheaper than their best price.
I told them give me my price and the deal is done. They did!

Again, it’s what you make of it, I do need to see, touch, drive the same vehicle I am going to buy

[cockerpunk]

every few years there is a new study on dealerships, and all of them that i have read cites that a typical car transaction, the dealership costs the consumer about 2 to 5 thousand dollars that they otherwise would not have to pay.

its almost like adding a third party profit motive to the supply chain adds cost to the consumer and adds no value for them! guess that ones free cause i didnt need to go to business school to know capitalism 101. its seriously a no-brainer.

here is one such example, but if you google there are many, giving out a range of of costs: https://consumerfed.org/press_release/anti-competitive-state-laws-cost-new-car-buyers-more-than-20-billion-per-year/

[javadog]

Originally Posted by cockerpunk

every few years there is a new study on dealerships, and all of them that i have read cites that a typical car transaction, the dealership costs the consumer about 2 to 5 thousand dollars that they otherwise would not have to pay.

its almost like adding a third party profit motive to the supply chain adds cost to the consumer and adds no value for them! guess that ones free cause i didnt need to go to business school to know capitalism 101. its seriously a no-brainer.

here is one such example, but if you google there are many, giving out a range of of costs: https://consumerfed.org/press_release/anti-competitive-state-laws-cost-new-car-buyers-more-than-20-billion-per-year/

You have no idea what you’re talking about. One of the two of us has been a car dealer and I’m going to bet that it wasn’t you.

I know what car dealerships make and your numbers are just pie in the sky fantasy. We made far more money on used cars than we did new cars and we were happy to make a grand. Five grand? Never happened. There wasn’t five grand between suggested retail and our cost, and the days of making big money in the F and I department are essentially long gone.

That’s why you see dealerships raising their service department rates so high. That’s where they make whatever money they make. New car sales has a hard time breaking even after the overhead is factored in.

[cockerpunk]

Originally Posted by javadog

You have no idea what you’re talking about. One of the two of us has been a car dealer and I’m going to bet that it wasn’t you.

I know what car dealerships make and your numbers are just pie in the sky fantasy. We made far more money on used cars than we did new cars and we were happy to make a grand. Five grand? Never happened. There wasn’t five grand between suggested retail and our cost, and the days of making big money in the F and I department are essentially long gone.

That’s why you see dealerships raising their service department rates so high. That’s where they make whatever money they make. New car sales has a hard time breaking even after the overhead is factored in.

i pegged pretty early on that you work(ed) at a car dealership. nobody gets defensive about car stealerships if they don't (didn't) profit from them.

people don't much like being told they are worthless middle men milking consumers of money using anti-capitalist legal methods, but that doesn't mean its not true.

whats the quote "half the human race is middle men, and they hate being cut out of the deal" https://www.youtube.com/watch?v=IFyxmdnv3qE

[javadog]

I didn’t just work at a car dealership, I owned one. Before that I ran one, before that I ran two service departments, a body shop operation, parts operations, etc. There’s nothing I can learn about that business from an overconfident engineering student who, by his own admission, doesn’t even drive a car on the street much anymore, because he’s “past that.”

Take the advice you were given by others, just shut the **** up. You have no clue about this.

[GH85Carrera]

Originally Posted by javadog

I didn’t just work at a car dealership, I owned one. Before that I ran one, before that I ran two service departments, a body shop operation, parts operations, etc. There’s nothing I can learn about that business from an overconfident engineering student who, by his own admission, doesn’t even drive a car on the street much anymore, because he’s “past that.”

Take the advice you were given by others, just shut the **** up. You have no clue about this.

Replying to a troll, and really dumb troll is just a waste of time. They all enjoy making insanely stupid comments just to make anyone with brains and experience mad and get a reaction.

One of my friends that runs an aviation business has a 18 year old daughter that brought home a boy to meet her dad. The kid proceeded to lecture the dad on the way a business should be run, and that the government need a lot more regulations on business. This was from a kid that had never had a job in his life, as his parents were both doctors. So a kid that had never been involved in business in any form, except to buy stuff with mom and dad's money was convinced he knew how to regulate and control businesses.

It sounds familiar right now.

[cockerpunk]

Originally Posted by javadog

I didn’t just work at a car dealership, I owned one. Before that I ran one, before that I ran two service departments, a body shop operation, parts operations, etc. There’s nothing I can learn about that business from an overconfident engineering student who, by his own admission, doesn’t even drive a car on the street much anymore, because he’s “past that.”

Take the advice you were given by others, just shut the **** up. You have no clue about this.

i mean, thank you for proving the point, in spades.

it actually explains a lot about your personality and our interactions to find out that you have been in the car dealership business for so long. as always, the most firm capitalists, are actually not really capitalists at all, they LOVE government intervention to make them money and prevent competition. and they actually hate capitalism and competition.

[asphaltgambler]

It's an interesting discussion, my much older brother started as a general service tech in high school, late 60's at a local mom / pop Chevy dealership. He then worked as a tech briefly, then to a 'service assistant' which is now called service writer. Lots of changes since then, I've worked in 2 Euro dealerships and @100 indies.

I think manufacturers absolutely need dealership principles, and vice /versa. But what is changing is how customers want to do business. The service business model remains largely unaltered from the 1930's. But retail service / parts pricing continues to increase the COD (Cash on Delivery) work will dry up completely. As I last checked, warranty work makes up @82% of service dollars. While warranty work is necessary, the profit margin is waaay less than COD work.

A good example: the Duramax diesel engine in the Chevy Trucks have some issue where the heads need R&R'd to fix leaks, injectors or something related. COD time = 45 labor hours. Warranty time/ 14.5...…...

[javadog]

Originally Posted by cockerpunk

i mean, thank you for proving the point, in spades.

it actually explains a lot about your personality and our interactions to find out that you have been in the car dealership business for so long. as always, the most firm capitalists, are actually not really capitalists at all, they LOVE government intervention to make them money and prevent competition. and they actually hate capitalism and competition.

This is from a clown that never went to business school, never started and ran his own business, never worked in a dealership and probably has never bought a brand new car from one, either.

Glen and Hugh are right, it’s pointless wasting time with the likes of you.

[javadog]

Originally Posted by asphaltgambler

It's an interesting discussion, my much older brother started as a general service tech in high school, late 60's at a local mom / pop Chevy dealership. He then worked as a tech briefly, then to a 'service assistant' which is now called service writer. Lots of changes since then, I've worked in 2 Euro dealerships and @100 indies.

I think manufacturers absolutely need dealership principles, and vice /versa. But what is changing is how customers want to do business. The service business model remains largely unaltered from the 1930's. But retail service / parts pricing continues to increase the COD (Cash on Delivery) work will dry up completely. As I last checked, warranty work makes up @82% of service dollars. While warranty work is necessary, the profit margin is waaay less than COD work.

A good example: the Duramax diesel engine in the Chevy Trucks have some issue where the heads need R&R'd to fix leaks, injectors or something related. COD time = 45 labor hours. Warranty time/ 14.5...…...

My best technicians could eventually beat the warranty time on jobs they did over and over again, but they were not complex jobs like that one. Wrenching on cars is a really tough way to make a living, it’ll make an old man out of you quick.

Ironically, one of the reasons I got out of the car business was that the customers were becoming such *******s. They’d sell their mothers to save $50 at a dealership in the next town.

[flipper35]

Again, as it currently sits the dealership is the customer of the manufacturer. The dealer orders what they think they can sell and seldom order what people want, just most of what they want.

[javadog]

Dealers are happy to order any car, for any customer. They are also happy to trade with other dealers, for a car that matches the customers desires. Dealers do order cars for stock, because probably 90% of customers want to buy some thing right then and there and not wait three or four months to get something made.

Not every customer wants the same thing, dealers have to accommodate everybody.

Personally, I ordered a bunch of cars in my lifetime.

[cockerpunk]

Originally Posted by javadog

This is from a clown that never went to business school, never started and ran his own business, never worked in a dealership and probably has never bought a brand new car from one, either.

Glen and Hugh are right, it’s pointless wasting time with the likes of you.

lol. actually i bought my first brand new car at 22. but whatever.

you know nothing about me.

and you've shown your cards and why you are happy and proud of being a middle man that adds no value to the transaction. you wanted a study, i showed you one, and now all you have left is to impotently attempt to attack me personally.

[Steve Carlton]

What franchise did you have, javadog?

[javadog]

Originally Posted by Steve Carlton

What franchise did you have, javadog?

Started out with a store that had Honda, Chrysler, Dodge and Plymouth. Second store was Honda only. Had friends with Porsche, VW, Audi and others.

Had a friend that had the first Ferrari franchise in Oklahoma, way back in the 1970s.