Should Dealerships Go the Way of the Dinos?

[Joey D]

First off I'm not sure if this should go here or in the Opinion Forum.

Brandweek asks: what if we got rid of car dealerships?

Source: Brandweek, Autoblog

Link to PDF file: http://www.brandweek.com/brandweek/images/pdf/AutoReport.pdf

With the charge that "today's dealer/factory model is a supremely inefficient system," Brandweek's Steve Miller has put together a 6-page report called "A Whole Lot of Questions" that wonders what would happen if the entire brick-and-mortar, kick-the-tires-and-sign-here institution were done away with.

Coming from Brandweek, the article naturally takes a close look at the the multiplicity and overlapping marketing and advertising efforts (national, regional, local) that are often redundant, sometimes annoying, and add to the cost of each car. However, it also spends a fair amount of time examining the arcane and financially complex relationships between manufacturers, dealers, the dealer lobby, and franchise laws (and how much that relationship costs), the inability to easily compare many different models on-site, and observes that car salesmen are consistent bottom-dwellers in three decades of Gallup polls surveying honesty and ethics (only telemarketers fare worse). Nevertheless, everyone admits that for all of its inefficiencies, the dealer experience delivers most of the experience that a car buyer is looking for. For the moment, barring a revolution in mindsets and a billion dollars to pay for creating a more efficient system, the dealership network could be the best option -- and this was stressed a couple of times -- "for now."

 

[Wolfe]

If I want a used car, I'll scour the internet. If I want a new car, I'll order it from the manufacturer. To me, the only purpose of a dealership is to allow me to see a new car in the metal, and to make me wish I could bluff my way into a test drive with the sportier models.

 

[Joey D]

Warranty work as well, but auto makers could just have service centers.

 

[Wolfe]

Warranty work as well, but auto makers could just have service centers.

Right. I forgot about that. Goes to show you how many new cars I've owned...

 

[YSSMAN]

Dealers drive me crazy, and it wouldn't be a completely missed thing. But that being said, the trip to the dealer in itself is probably one of the most important pieces of the whole trip...

As someone who has been dealing with dealers all week this week, I can't stand the way they do things some times. One of the local Pontiac dealers refuses to play ball with pricing, and that indeed is a good way to lose business...

 

[a6m5]

I totally understand how sales tactics used by car dealers can upset people. They will B.F. you, if you let them. I've never been ripped off, so it's not like I have a grudge against car sales people either. But having said that, dealers don't just sell cars.

Forgive me for not reading the original article(I can't deal with PDFs), but most car companies are barely capable of the tasks assigned to them now. I'd love to see them try to handle the trade in's, warranties, recalls, parts distribution, etc., etc.

Plus, if a dealer is poorly ran, customers will probably just go to another dealership. What if the manufacture-ran system upset the customers? There aren't other dealerships for them to deal with. Most likely, large chunk of customer base will leave the particular brand altogether.

P.S. I think the fixed pricing system used by Saturn & Scion dealers is nice. You won't get a steal, but they can't steal from you either. Car buyers instead can focus on the car loan + the trade-in.