Automakers Doing Away With Traditional Car Dealerships?

[f.f.jones]

 

Since the pandemic, the sales process for car dealerships has changed as a lot of their sales are now completed entirely online. In the future, the physical automotive dealership may just process maintenance services like car service and valeting, but all purchases will be completed online.

 

https://www.msn.com/en-us/autos/news/automakers-doing-away-with-traditional-car-dealerships/ar-AA16TVjc?ocid=mailsignout&li=BBnb7Kz

[John_S_in_Penna]

In the future, they "may"...

 

While some points may be valid, I think it's just another

news writer speculating.  I don't give them much credence.

[hidden_hunter]

This just in, manufacturers seek to increase profit... 

 

Cant' say I'll feel too bad for most dealership though, some truly awful experiences over the years

[TAKerry]

4 hours ago, hidden_hunter said:

This just in, manufacturers seek to increase profit... 

 

Cant' say I'll feel too bad for most dealership though, some truly awful experiences over the years

We were out to dinner on a sat evening. Next door was a jeep dealer. The new Grand Cherokee had just come out and we had a liking to them. After dinner we stopped in 'just to look'. It was about 7 on a Saturday night. There was no salesman there only the finance guy. Really nice guy. We struck up a deal and traded our 3 yr old Grand Prix on a brand new G Cherokee!! Not a minute of haggle, confrontation, insecurity etc. etc. By far the easiest vehicle I have ever purchased. THEN, while the one lone guy in the shop did the prep work we were directed to their marketing dept. I suppose. THIS girl was by far the most annoying person I have ever run across at a dealership. She kept trying to upsell everything. She literally gave me a headache and hounded us for 45 minutes whilst our 2 small children were wreaking havoc on the showroom floor. After all was said and done, the "salesman" asked how things were. I explained that I would buy 100 cars from him but if that lady was anywhere near the building I would RUN not walk away. He said he knew exactly what I was talking about as she had a negative reaction with everyone she met, and he apologized. Never went back there and that Jeep was one of the best cars I ever owned.

[Steve Moskowitz]

Just clickbait and speculation.  A rather cursory view by the writer of the issues involved with little background on the legal and financial hoops that both dealers and the manufacturers are going to be stuck with.  Nothing is forever and someday the distribution system could look a lot different.  The press has been predicting this for years so it is nothing new.

 

Naturally there have been some very bad experiences at dealerships.  Same with other businesses but many fail to realize how much charitable work new car dealers do in their communities.  Especially in the small towns where dealers sponsor just about everything.  On top of that they provide many families with a good living and pay a ton of taxes to their communities and states.  There are a lot of dealers that do a great job in taking good care of their customers.  

 

I am very biased as many of you know but I have seen first hand what the loss of local dealerships have done to some communities.  This may be the way of the future, little or no personal service and we just press buttons to get what we want but I for one would rather deal with a human.  I enjoy great customer service. 

[Leif in Calif]

11 minutes ago, Steve Moskowitz said:

Just clickbait and speculation.  A rather cursory view by the writer of the issues involved with little background on the legal and financial hoops that both dealers and the manufacturers are going to be stuck with.  Nothing is forever and someday the distribution system could look a lot different.  The press has been predicting this for years so it is nothing new.

 

Naturally there have been some very bad experiences at dealerships.  Same with other businesses but many fail to realize how much charitable work new car dealers do in their communities.  Especially in the small towns where dealers sponsor just about everything.  On top of that they provide many families with a good living and pay a ton of taxes to their communities and states.  There are a lot of dealers that do a great job in taking good care of their customers.  

 

I am very biased as many of you know but I have seen first hand what the loss of local dealerships have done to some communities.  This may be the way of the future, little or no personal service and we just press buttons to get what we want but I for one would rather deal with a human.  I enjoy great customer service. 

Right you are Steve! Porsche tried this circa 1980. It was a fiasco and since then the dealers have circled the wagons and have had legislators in many states write laws that protect them. Today all successful dealers have an internet and social media presence and deals are definitely done that way, but I doubt anyone reading this will see the end of dealers.  I also think they will be way different with far less inventory that they have been in the past.  It's another area where Tesla (no dealers) is causing a re-think.   

[TAKerry]

Steve, I agree and have nothing against new car dealers. I was just venting about an experience I had which was almost entirely positive up until the end!

Obviously being 'in the know' you are 100% correct. We have a local family owned GM dealership that is working on its 3rd or maybe 4th generation owner. They are very active in the community, and the family is well known and well liked. They def. give a lot back. But, that kind of dealership is getting harder to find with what I perceive as large corporations taking over as many as they can. We also have a Chrysler dealership that is part of a larger conglomerate, with their name on sales operations of just about every make up to 3 states away.

[Barney Eaton]

How about a terminal inside the dealership that lets you "order" a car just like going to any of the fast food places. 

Go in walk thru the various screens and when you get to the end it tells you where the car is.... either on their lot or it can be delivered tomorrow by Amazon. 

There would be an option at the end telling you this dealer has a car almost like you ordered that you can buy today.    

I think I am going to barf..........sorry

[rocketraider]

GM destroyed a lot of its smaller dealerships in this area, in their efforts to  "consolidate" their sales outlets into "territories".

 

The first casualty was the Cad-Olds dealer, in business since 1936 and had just spent a pile of cash on Centennial appearance upgrades. 

 

The weasel Chevy dealer had lusted for the Cadillac franchise for years but couldn't get it. Then the "sales territory" idea appeared and GM came up with some reason to terminate the existing Cadillac franchise and hand it to the Chevy dealer. Caveat was they had to take Oldsmobile as well, which they didn't want.

 

That was the year after I bought that needy Bravada and I had to rely on the Chev dealer to fix its myriad warranty issues. Let's just say it was an uphill battle. They were having the same issues with Blazers but since they didn't sell the Bravada new, they gave me a song and dance every time it had to go in. Which was often.

 

A couple of phone calls to friends in Rockville MD and Charlotte NC Zone Service offices almost got the Chevy dealer's service manager fired. By then I'd had it with them and started taking it to the Cad-Olds dealers in Greensboro and Reidsville NC, who treated me very well.

 

The Buick-Pontiac dealer wouldn't sell out to the Chevy dealer either. GM yanked their franchises and handed them to the Chevy dealer. They'd been a Buick agency since 1924.

 

Then the tentacles reached farther, to the small full line GM dealer 30 miles east. GM tried to saddle them with a million dollar appearance upgrade to keep the franchises. That dealership owner was 68 years old at the time with no heirs interested in continuing the business. He told GM to do anatomically impossible things and retired. It had been a Chevrolet dealership since 1936 and full-line except Cadillac since 1978. He did get some satisfaction by leasing the building to three former GM service techs who got displaced in the closings. Those fellows take a lot of service business away from the big GM dealer.

 

All these local businessmen supported their communities. The big conglomerate dealerships don't support diddly.

[Zimm63]

How many small dealerships of any kind are left anywhere?  In my area, there are really only two dealership owners left.  They own multiple locations and offer multiple lines, but they are by no means the small businesses of times past.  

 

The town I grew up in had multiple dealerships, all owned by local individuals.  Dodge, Chev/Olds, Buick, Ford, Mercury.  All independent businesses.  All gone now.  

[Paul Dobbin]

On 1/31/2023 at 11:30 AM, Steve Moskowitz said:

  I enjoy great customer service. 

       I do too!   However,  I'm going thru my list of 115 cars & trucks that I have purchased and I'm unable to get to 10% being         

       purchased at Dealerships or Auctions.   However, those that were, were mostly good experiences.   As a Insurance Salesman,

       rated just above Used Car Salesmen, I can understand the reputation thing.   I want to see car lots survive so I have a place to

       go kick tires.  All good buying experiences began with, "Just Looking".

Edited February 1, 2023 by Paul Dobbin
Re-position text (see edit history)

[gungeey]

Headquarters might like to think their cars will sell themselves. Years of selling many cars tells me it's a minority of buyers that will decide to hit the "green button" on their own. Most are hesitant.

 

It takes a pro to make that final commitment come to fruition. Meeting a confident professional car salesman that will find them the perfect car at a price they can afford (though it's a consumer's worst

 

nightmare) is as much a part of your next vehicle as setting up the car insurance. It has simply become part of the process that (many) people love to hate. Most wouldn't or couldn't buy a car without

 

it. 

Edited February 1, 2023 by gungeey
spelling (see edit history)

[MotiveLensPhoto]

Economies of scale are swallowing small businesses for every product, and many services as well. And Amazon and Walmart will destroy the rest. If the Carvana model of used cars takes off it could possibly expand to new cars. Assuming they even want a car. A lot of Gen whatever are choosing differently than previous generations. Blink your eyes and the world has changed.

[8E45E]

On 1/31/2023 at 9:30 AM, Steve Moskowitz said:

Naturally there have been some very bad experiences at dealerships.  Same with other businesses but many fail to realize how much charitable work new car dealers do in their communities.  Especially in the small towns where dealers sponsor just about everything.  On top of that they provide many families with a good living and pay a ton of taxes to their communities and states.  There are a lot of dealers that do a great job in taking good care of their customers.  

 

I am very biased as many of you know but I have seen first hand what the loss of local dealerships have done to some communities.  

Something the "new" GM failed to comprehend when they started cutting dealers left & right in 2009.  From their corporate level, they did not take into account the impact the sudden terminations of contracts had on long-time dealers, especially the 'small town' ones that were several generations.  

 

https://forum.studebakerdriversclub.com/forum/your-studebaker-forum/stove-huggers-the-non-studebaker-forum/45036-update-on-dealership-closings-or-nooo-really

 

https://forum.studebakerdriversclub.com/forum/your-studebaker-forum/stove-huggers-the-non-studebaker-forum/54157-ah-the-good-old-days-of-2008

 

Craig

 

 

[Rusty_OToole]

One good reason to NOT buy a Tesla is they don't have dealers. That means, there is no place to take one to get it fixed or serviced and no source of replacement parts. Teslas are being written off for fender benders because they can't be fixed, or because the factory authorized service facility is hundreds of miles away and it would take 4 months and cost $10000 to fix something that would take 3 days and cost $2000 to fix on any other car. There are auto salvage sites with Teslas 2 or 3 years old with less than 10000 miles on the clock that are being written off because the owner could not wait and the insurance company found it was cheaper to sell the car for junk, than pay for repairs and a rental for 4 months.

By the way this is a good business opportunity if you want to learn to fix Teslas and buy a few cheap junkers to strip for parts. There is a big demand for repairs and parts that the factory is ignoring.

[8E45E]

13 hours ago, Rusty_OToole said:

There are auto salvage sites with Teslas 2 or 3 years old with less than 10000 miles on the clock that are being written off because the owner could not wait and the insurance company found it was cheaper to sell the car for junk, than pay for repairs and a rental for 4 months.

By the way this is a good business opportunity if you want to learn to fix Teslas and buy a few cheap junkers to strip for parts. 

You can always install a time-tested-and-true Chevy V8 in one!!! https://forum.studebakerdriversclub.com/forum/your-studebaker-forum/stove-huggers-the-non-studebaker-forum/1932415-chevy-v-8-in-a-tesla

 

Craig

Edited February 2, 2023 by 8E45E (see edit history)

[bryankazmer]

14 hours ago, 8E45E said:

Something the "new" GM failed to comprehend when they started cutting dealers left & right in 2009.  From their corporate level, they did not take into account the impact the sudden terminations of contracts had on long-time dealers, especially the 'small town' ones that were several generations.  

 

 

 

 

 

 

GM cut two car lines and went from over 60% market share to about 25%.  They needed to have many fewer dealers for the volume/dealer to be healthy.  I'm sure the Buick dealer was not thrilled to find that the ex-Pontiac dealer down the street was now selling Buicks too.  The market would have sorted it out also.

[8E45E]

9 minutes ago, bryankazmer said:

GM cut two car lines and went from over 60% market share to about 25%.  They needed to have many fewer dealers for the volume/dealer to be healthy.  I'm sure the Buick dealer was not thrilled to find that the ex-Pontiac dealer down the street was now selling Buicks too.  The market would have sorted it out also.

The same happened in 1985/86 when Tenneco, who owned J.I. Case bought International's farm equipment division, and every small town had both a J.I. Case dealer and an International Harvester dealer.  Old story..ONE had to go!!

 

Craig

[charlier]

On 2/1/2023 at 5:23 PM, Golden73 said:

If the Carvana model of used cars takes off it could possibly expand to new cars. 

Numerous reports appear to indicate that Carvana is headed towards Bankruptcy before too long. Billions of dollars of debt (6.3B as of late December 2022) and declining used vehicle prices for vehicles that they paid too much for are just two of their problems. 

[MotiveLensPhoto]

4 hours ago, charlier said:

Numerous reports appear to indicate that Carvana is headed towards Bankruptcy before too long. Billions of dollars of debt (6.3B as of late December 2022) and declining used vehicle prices for vehicles that they paid too much for are just two of their problems. 

True, but it is the model I was referring to. The future buyer isn't as interested to go to the dealer, and the other dealer, and back and forth. Shop the internet while working from home.

[Bryan G]

On 2/1/2023 at 6:08 PM, Rusty_OToole said:

One good reason to NOT buy a Tesla is they don't have dealers. That means, there is no place to take one to get it fixed or serviced and no source of replacement parts. Teslas are being written off for fender benders because they can't be fixed, or because the factory authorized service facility is hundreds of miles away and it would take 4 months and cost $10000 to fix something that would take 3 days and cost $2000 to fix on any other car. There are auto salvage sites with Teslas 2 or 3 years old with less than 10000 miles on the clock that are being written off because the owner could not wait and the insurance company found it was cheaper to sell the car for junk, than pay for repairs and a rental for 4 months.

By the way this is a good business opportunity if you want to learn to fix Teslas and buy a few cheap junkers to strip for parts. There is a big demand for repairs and parts that the factory is ignoring.

I get to deal with Tesla regularly on the insurance side; what a pain. The corporate owned stores might treat customers well (I don't really know) but they treat your insurance company like something they stepped in. It's tough (and expensive) for independent shops to get certified to work on their cars. Non-certified shops have to pay full list price for parts, and Tesla won't deliver them. In the rural area where I live, there are no certified repair shops. Wreck your car, have it towed hours away. Any other car in the Tesla price range, essentially, you can easily get fixed anywhere, and a traditional dealer network supports that.

[Rusty_OToole]

That is the point. I don't like dealers very much but they do serve a function. I have heard car manufacturers consider the parts and service side of the business a pain in the neck. They would much rather make a car, sell it, and never hear of it again. But they are obliged by law to have dealers and to provide parts and service. I don't know how Tesla gets around this.

[rocketraider]

Because Tesla are the darling of the electrification crowd. There have always been different rules for the most favored whatever.

 

The more I read about their business model and practices, the more certain I am that if I ever own an EV it won't be a Tesla.

 

This from one who used this as his work computer's wallpaper for years. And when the young pups asked "who's that?" the answer was if not for him you wouldn't have your high-paying powerplant job.

 

But Mr Tesla did things his own way too and often paid a high price for it.

[ojh.]

In a few years some marketing schools will stumble on the concept of 'Service' and they'll reinvent the human interaction at the point of sale.  The whole concept of retail sales will turn upside down as people abandon the cold 'non-personal' sale exploited by Amazon and the internet.  Imagine the reception of a market where a polite cashier checks you out on a regular cash register while your groceries are being bagged or somebody at the counter takes your order for a cheeseburger & fries and makes change for a $10 bill because credit cards have gone out of flavor.  Its coming, people are backing away from all this selfservce crap and that paying with plastic is quicker.  

[charlier]

On 2/3/2023 at 4:57 PM, Golden73 said:

True, but it is the model I was referring to. The future buyer isn't as interested to go to the dealer, and the other dealer, and back and forth. Shop the internet while working from home.

Thanks. I do realize you were referring to the model. I was just pointing out that Carvana's implementation of that model appears to be headed for failure.

 

BTW, I am an example of the future buyer you mentioned. When I purchased my 2022 Toyota RAV4 Hybrid I researched it online. I interviewed Toyota Dealers via email (No phone calls or dealership visits). I completed the sales order and deposit online from home. The only time the selling dealer saw me was when I picked up the vehicle. 

 

I did go to a sister dealer to the one I purchased my vehicle from to test drive a pre-owned vehicle they had to see how it drove. I am glad I did do that because the one I test drove had a "sport" suspension that on Pennsylvania's crappy roads was not a pleasant ride. 

[gungeey]

7 hours ago, charlier said:

Thanks. I do realize you were referring to the model. I was just pointing out that Carvana's implementation of that model appears to be headed for failure.

 

BTW, I am an example of the future buyer you mentioned. When I purchased my 2022 Toyota RAV4 Hybrid I researched it online. I interviewed Toyota Dealers via email (No phone calls or dealership visits). I completed the sales order and deposit online from home. The only time the selling dealer saw me was when I picked up the vehicle. 

 

I did go to a sister dealer to the one I purchased my vehicle from to test drive a pre-owned vehicle they had to see how it drove. I am glad I did do that because the one I test drove had a "sport" suspension that on Pennsylvania's crappy roads was not a pleasant ride. 

Did a human being help you when you were at the "sister"dealership was it self service? 

[39BuickEight]

Why would a person buy a Tesla if they didn’t live anywhere near a service location?  That’s just being a bad consumer.  Some dealers will travel to come get your car for service-typically the Lexus/Mercedes/Rover types.  If I lived more than 30 minutes from somewhere that could work on my car, and they weren’t willing to come to me, I wouldn’t buy that car.

[Rusty_OToole]

Tesla has about 160 service centers in the US or average of 3 in each state. To service some 2 million cars. Wonder how many buyers bother to look into the service and repair angle? My guess is not many or they wouldn't buy them.

[joe_padavano]

5 minutes ago, Rusty_OToole said:

Tesla has about 160 service centers in the US or average of 3 in each state. To service some 2 million cars. Wonder how many buyers bother to look into the service and repair angle? My guess is not many or they wouldn't buy them.

 

 

https://www.carscoops.com/2022/11/gm-has-been-quietly-repairing-teslas-with-great-success-but-how-does-it-work/

Edited February 7, 2023 by joe_padavano (see edit history)

[Rusty_OToole]

You know you are in trouble when a GM dealer is the convenient, low cost place to get your car fixed.

[TAKerry]

On 2/6/2023 at 9:07 PM, 39BuickEight said:

Why would a person buy a Tesla if they didn’t live anywhere near a service location?  That’s just being a bad consumer.  Some dealers will travel to come get your car for service-typically the Lexus/Mercedes/Rover types.  If I lived more than 30 minutes from somewhere that could work on my car, and they weren’t willing to come to me, I wouldn’t buy that car.

I was conversing Monday with a good friend and Tesla owner about his car. It seems that all I have heard about these vehicles is conjecture form non owners. Any service work for his car is performed in his driveway. The tech comes to the car. Including tire changes. Of course I dont think there is the maintenance associated with one of these that we are used to, oil changes, etc. I would surmise the techs are more a cross between a computer geek and a handy mechanic.

[SC38dls]

I bet they ask a lot of questions before they send the tech (computer geek) out compared to the mechanical computer geek out. The first deals with small chips and uses gadgets and the later needs tools! Tool guys are real people. Computer guys are just geeks. 
dave s 

Edited February 8, 2023 by SC38dls (see edit history)

[TAKerry]

He told me that most of the 'service issues' should be able to be handled through the computer connection. If a physical problem occurs the appt is made through the app and a tech will be on site. He has only had his car since early Dec, a model y and his low tire pressure sensor keeps going off even after he has checked to make sure the tires are properly inflated. He was told the problem 'may fix itself' and to 'let it ride' for a few days. I must say it took my truck 10 years before this sensor started to act up!!

[39BuickEight]

The aspect of maintenance on electric cars is very interesting.  I recently rode in a Chevrolet Bolt while using Uber in San Francisco.  I asked a million questions.  This was his 2nd Bolt.  He said he put 183,000 miles on his first in less than 2 years while driving for Uber.  He said all he did was charge it every 280 miles and replace the tires one time.  That was it.  No other costs, no brake pads, nothing.    He said it still went 280 miles per charge just like it did when it was new.  He said he only replaced it because Uber customers don’t like riding in cars with 183,000 miles on them. 
 

Of course, San Francisco is the perfect climate, perfect infrastructure (plenty of charging available with no wait), and perfect commuter habits for EV’s, but they definitely have a use and a place.

Edited February 8, 2023 by 39BuickEight (see edit history)

[Barney Eaton]

My daughter lives in a development on the far east side of Dallas.   There are 47 houses in her development. 

There are 6 Tesles that we know of and she is one of them.    I could not own a Tesla and many of the new cars

mainly because everything is on the touch screen and to do something like turn on the seat heater you must know where to go just 

to turn something on or off.    

[John348]

11 hours ago, TAKerry said:

I was conversing Monday with a good friend and Tesla owner about his car. It seems that all I have heard about these vehicles is conjecture form non owners. Any service work for his car is performed in his driveway. The tech comes to the car. Including tire changes. Of course I dont think there is the maintenance associated with one of these that we are used to, oil changes, etc. I would surmise the techs are more a cross between a computer geek and a handy mechanic.

 

One of the kids my son went to high school with is a tech for Tesla. He was a tech for Audi prior and was hi-jacked by Tesla. He was offered anywhere he wanted to work in the country , he is now out in Huntington Beach California.  He was in town for the Holidays and stopped by to see my son who was in town as well.  He said it was real easy nothing really goes wrong, he did say older people are hard on touch screens. I did ask him if the vehicle was in an area where it could not be serviced what would he do and he told me they have local a GM dealership under retainer where he can have the vehicle transported to work on