Still wondering what’s going on with the car dealers

As I have posted a few times in the last few weeks, I do not understand the logic behind reducing dealers and saving the car companies. I understand why the manufacturers might want to reduce the number of dealers, but I do not understand the use of cost savings as the justification. I have been waiting for an answer from them or somebody.

I thought I might get one from the Congressional hearings last week, but if an answer was provided, it never made the press. I suspect it was not provided as the House members involved do not understand business (except that it should be taxed) well enough to ask the right questions. I may be wrong, but I don’t choose to listen to hours of hearings in the hope I might find my answer.

The car company execs simply stated that they “needed” to reduce the number of dealers to survive. I suspect, like many small children, they have confused “need” with “want.” And in this case, under Chapter 11, and without proper probing, they can get what they want.

Again, I do not disagree that they had too many dealers, I just wonder if they yet know what they are doing. Probably one of the best comments I read came from Rep. Bart Stupak of Michigan who stated that “When it comes time to purchase a new vehicle, many of my new constituents will abandon GM or Chrysler and go to whichever brand is still sold locally …”

As we have said for many years, How the customer wants to buy is critical to their buying process and whether you get a chance to serve them. Failure to support your customer’s buying process preferences leads to lost sales. Time will tell if Rep. Stupak’s statement is prescient.


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