Posted on 12/13/2011 3:49:39 PM PST by decimon
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According to Automotive News, Honda has issued an ultimatum to its dealers: Stop selling cars below invoice price through these websites, or lose the per-car marketing spiffs that the factory gives dealers. Since Honda corporate turned the screws on its dealers in October, TrueCar says Honda sales through its service are down.
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(Excerpt) Read more at autoblog.com ...
As I recall, they wanted to set up regional service centers and possibly regional inventory banks. Many Dealers were not in favor.
It took a second set of search terms to cough this up:
"Porsche dealers reacted with hostility and a flurry of lawsuits when Porsche A.G., the West German maker of expensive sports cars, announced plans last month to abolish its franchise dealer system in the United States. Porsche, at the time, said consumers were dissatisfied with existing dealers. The company also said it wanted to prevent price gouging on popular models by dealers and to set repair standards. The company was planning to cut in half the commission it pays on each sale and to establish its own sales agents and company-owned sales and service centers. It did not publicly estimate what savings, if any, would result. "
http://www.nytimes.com/1984/03/14/business/the-porsche-franchise-fight.html
Here is a more recent article from Mother Jones. The comments are interesting. MJ is a left wing rag but I have some agreement with the strong lobbying effort by dealers. The article blames Reagan and Bush but almost all politicians support the dealers. Many comments indicate that online sales would not be a major force. The dealers clearly do not believe it. They lobby vociferously to restrict competition of online sales. I am firmly opposed to the state dealer franchise laws. I think the laws restrict interstate commerce and increase consumer prices.
http://motherjones.com/politics/2009/02/why-you-cant-buy-new-car-online
The manufacturers do work hard to control the dealers as much as possible (e.g. stuffing them with high profit, expensive loaded vehicles). The fact that there are 50 states to deal with and the fact that the dealers have lots of pressure to bring on the state legislators and Congressional reps acts to maintain the local laws. The dealers could use some power to keep the manufacturers from completly running their businesses.
Back in the old days, options were much more individually available and ordering a vehicle to be built to one's combination of desires and price point was good for those of us who knew what we wanted and could wait for it.
I've always thought that the dealer could be replaced with a vending machine type of arrangement (like those pigeonhole parking operations some large cities used to have). Order your vehicle and pay for it up front. Go to the parking lot and pick it up the day it arrives.
Even better would be to order your vehicle and get a one way ticket to the factory and pick it up there to avoid both the transportation and inventory costs.
My last two vehicles were purchased over the internet (the local dealers had sold out of what I wanted) and it worked out OK. There's a dealer in Kellogg, Idaho that advertizes all over the west and seems to do quite a bit of out of state business. He has annoyed many other dealers.
I think there were quite a few lawsuits by dealers against Ford when Ford dropped out of the heavy and medium duty truck business (1990's).
Except the “American” cars that suit our needs are overpriced, union-made, steaming piles of sh*t
Wrong.
I drive an American car.
Before this one, I drove an American car.
Both made in the USA. Best cars I ever had.
Your propaganda is no good here.
This is BS as far as the dealers loosing on every sale but making a profit on volume. The dealer rarely sells a vehicle for less than he paid the manufacturer for it. Looking at individual vehicles, it is possible that a dealer can loose on a sale if the vehicle has been on the lot for many months.
Eliminating the dealer would save on some costs, so I'd think that average prices would be lower, but the process of buying could become more complicated and there may be fewer sales if cars couldn't be an impulse purchase.
I was window shopping at a Chevy dealer one time and on the sticker it said “Engine made in Brazil”.
Refute THAT, smart boy!
There are some things that even cars shouldn't see.
Oh my.
I am re-assessing my core belief system now.
Thank you for showing me the error of my ways.
I’m persuasive like that.
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