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Excess dealers costing billions

1419 Views 0 Replies 1 Participant Last post by  rickaren
At least 10 competing Dodge stores are within a half-hour drive of his store in Brockton, and last year they fought over nearly 4,000 fewer customers than the year before.

The competitive disadvantage is wide for dealers, too. The independent dealerships that sell GM, Ford and Chrysler vehicles in the United States -- 15,741 in all -- sell half as many vehicles per store, on average, as top Japanese rivals, who have fewer than 4,000 retail outlets in the United States

Across America, Detroit-brand dealerships had about 800,000 fewer sales to divvy up in 2006 than in 2005. That translates into about $1.2 billion less in combined gross profits for stores, while costs are rising.

Dealers who sell Ford, Chevrolet and Chrysler average fewer than 600 sales per store each year. Those selling Toyota, Honda or Nissan: more than 1,200.

Heavy discounting devalues the brands and models that consumers buy, Miller said. So when that customer tries to resell a vehicle a few years later, all the discounting that happened in the interim has depreciated the vehicle faster than expected. As a result, that customer will usually think twice before they buy that same brand again.

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