Industry News & Trends

How important is your local car dealer? Let’s reflect.

NOTE: I had the remove the videos, the script was causing some browser issues. You can find the videos here http://www.msnbc.msn.com/id/8004316

DealerRefresh readers,

In case you didn’t catch NBC’s news tonight, I thought you might like this story. Why is it we had to get to where we are today for the media to do a positive story about Car dealers and their contribution to the fabric of the American community? There is a positive almost inspirational message in a mostly gloomy story about the “demise” of the local car dealer.

Sometimes they don’t know what they’ve got till it’s gone.

Best Regards,

Todd Fellmer

Thanks Todd! – Jeff

Todd, thanks for the link to this video. I'm so happy to have a medium available to publish and push out a message like this.

This kind of shit straight up brings tears to my eyes. I know it's time to purge out the weak but it hits hard being in this business and seeing good dealers go through such a rough time.

Jeff
It is hard to think of all the charity causes that will take a hit through this mess. One thing most of us have more of now is time. It is amazing what little you can give in time to help a charity. You'd be amazed what kinds of things each charity group needs - there is probably something you can help them with in a matter of minutes.
K
I think this is a reflection of global economics reaching down to the auto industry. Each dealership must become more efficient and cost effective to continue to compete and grow, and those who do not are ruthlessly driven out. Similar to what we have seen with how the imports are faring against the domestics, especially in the smaller, fuel-efficient vehicles where the imports have a significantly lower labor cost (read: efficiency). Remember when "Buy American" was the motto? With a global economy, that is now becoming a thing of the past. "Local" dealers now are competing with dealerships hundreds of miles away, and the consumer is willing to travel to where they perceive/find the better deal. Sad? Perhaps - but inevitable... Hope I didn't contribute to your tears Jeff - Kevin Frye/eCommerce Director/Jeff Wyler Automotive Family
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    Andrew Wright
  • November 20, 2008
It's nice to see some good news about car dealers. Unfortunately it had to come at a time like this. Macroeconomics are dictating now and it is going to change the landscape in dealer world. I'm optimistic though that we will come out of this stronger, leaner and more efficient.
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    Audrey Knoth
  • November 20, 2008
Don't blame the news media for not providing positive stories about car dealers and the industry in the past ... the industry has never invested resources into building positive reputation and recruiting independent third-party advocates to speak on its behalf. Positive stories don't happen randomly ... they are driven by positive messaging. This is classic public relations that most other large industries routinely embrace. Think about the pharmaceutical industry and how it has a big push on its programs to provide free or low-cost prescriptions to the needy. I've never understood why the auto industry, both from the manufucturer's standpoint and the retail standpoint, never invested in a consistent public relations program. In the past, there has been no shortage of resources to craft such a program and it would have required just a fraction of what the industry spends on advertising. It's ironic, given that we all know that car dealers tend to be the largest contributors to charity in their communities, as this video highlights. The industry is paying the price now, which you can see in the virulent public sentiment against the heads of the big three "begging for a bailout." Will the crisis cause the industry to reinvent itself from a PR standpoint?
Very nice Audrey, you are right about that.

"Will the crisis cause the industry to reinvent itself from a PR standpoint?"

I would have to say yes, but I also think it might depends on how long this wave lasts.
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    Pete
  • November 20, 2008
Jeff, it's time for the innovative to take charge. What I would like to see is employee purchased dealerships and even factories. It's not a new model but has proven in the past to be a success. If from every level, sales to production had a stake in what was in the best interest in totality of how to operate a company what do you think would happen?
M
Pete,

In response to your last comment. I used to be a regional manager for Auto Extra.com. I flew into Tennessee one week and one of the reps took me to a dealership www.cityauto.com The people that work there are all partners. Different owners and sales people who are also owners that sell their inventory together. Check it out it might be what you are talking about here.
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    Pete
  • November 21, 2008
Mike,
Thanks. That is a great example for pre-owned. It's time to structure some new car dealers in the same way. It will take time though because some dealers don't want to admit that the franchise is now worth $0.
So wait till the smoke clears...it truly is a new economy that is emerging.
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Pete,

My uncle used to own some Opel dealerships in Holland that he gave to the employees. It was set up in a trust and the employees cannot sell their share of the dealership to guarantee existance forever in theory. My dad and brother are GMs at the stores, but the dealerships are owned by the employees. Visit www.opeldealer.net

Since then my uncle has passed away and the dealer group has expanded from 2 to 6 locations. This way you never have to worry about drastic management changes or sale to corporate party.

I think it is a great idea and inline with what you see happening online. Many websites offer ways to their clients to decide what happens with a business (e.g. design you own shirt you can sell on their website, etc)

Here is a great website for market trends that talks about this idea of customer involvement:

http://trendwatching.com/trends/CUSTOMER-MADE.htm

How would you feel as a customer if you were a part owner of the dealership where you service based on the cars you own and how often you service?
O
Here is another article on their sister website about a brewery being started by consumers:

http://www.springwise.com/food_beverage/crowdfunded_breweries/

Have fun on these websites, they are a great way to think outside the box!!!
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    Pete
  • November 21, 2008
Jeff, maybe better, a LinkedIn directory page on Dealer Refresh. I think it would look great showing a couple of hundred profile badges with title info.
M
In my area two Ford Dealers have closed in the last couple of weeks. Both were in small towns so I am wondering how big of an effect it will have on their local economies and the giving.
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    Stew Pedasso
  • November 21, 2008
It's truly sad to watch all these dealers across the country go OOB.
Dealers that have been solid contributors to their community, and overall good people.
It amazes me that there isn't more local support for these dealers.
I guess in this economy there isn't a safety zone, or shining knight around.
All dealerships are liable, and on their own without a bailout.
R
This is one of those moments in history, where if we, as the American people, let our auto industry implode, 10 years from now, when we are a second tier economy, we will all be saying to each other "what were we thinking?", "How could we have let the auto industry collapse?". The bottom line is that the automotive manufacturing business single-handedly created the American Middle Class which is what has fueled US economic development for the last 90 years. Look, I am all for laissez faire politics, and throwing boys in the deep-end to learn how to swim... But, when the bubble start coming up from the bottom of the pool, you gotta jump in, go to the bottom and drag that kid up for air!!!! The USA economy is not as invincible as so many people seem to think it is, just look at the last 6 months... If we let the car business go belly up, we are signing our own economic death certificates.
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  • November 22, 2008
I'm curious how a lot of you feel regarding this but I've heard a tremendous number of comments from the general public AND dealers saying that many of the dealers are going out of business due to bad business practices. Reasons are various but customer relationship and legal issues are brought up often.

While I agree that losing any businesses of the size many of these dealerships are in smaller towns and cities is a loss for the communities they contribute to but how many of you think that in the long run this could be a good thing?

From a business standpoint, for me, the more dealers the better off I am. Have to say I'm a bit torn on this one. While some of these dealerships are merely having bad luck at a bad time, I have to believe that some of those comments re bad business I'm hearing are right.

As a dealer that practices good business, excluding just the competition factor, do you feel the automotive business as a whole will be better off without some of these dealers?
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Hi,

This is definitely a tough time for all the dealers. Those with a good reputation too are suffering.It shouldn't take much time to have good times back for the dealers.

-Nancy
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    Stan Sher
  • November 29, 2008
This is one of those stories that certainly shows that this business is a great business. The key to keeping a great reputation such as the one we just viewed is to always give back to the community and to do the right thing by your customers at all times. I think this video certainly helped this dealership with reputation management. This is no different then a famous celebrity that donates to charity to help make the world a better place.

-Stan
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