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Old 05-15-2009, 12:51 PM
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RRUNNER
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Originally Posted by BLK 6050
My question is:

What exactly does a dealership cost Mother Mopar? Since the Chrysler Mother Ship doesn’t “own” the dealership, what are they really saving by closing down a dealership? It would seem as if the answer is “nothing”, so why close them down? I have never owned a dealership, but it seems as if they are the ones that invest “their” money in the building, promoting (advertising), running, and updating of their individual businesses.
I can perhaps see a problem with supply of product from the factory should a dealership wish to stay open, but many of the smaller dealerships also sell other brands in addition to Dodge, Chrysler, and Jeep. And, I remember a dealer once telling me that his service and parts departments were the real money makers for his dealership. Can’t say I feel sorry for the dealers that tack-on “market-value” mark-ups, but if a customer doesn’t like the way a dealership does business…go down the road to the next dealer. That’s what I did while looking for my ’08 Challenger. I have always felt that if a dealer’s word means so little to them, it will have even less value to you when the chips are down. A lot of people are going to be facing hard times for one reason…”Government Involvement”. We need the market to dictate were the market will go, not the government.
The answer is probably that there are just too many dealers and none are making the profit they should because of another dealership "just down the road". Less dealerships means more profit for the ones that remain, and that makes for a heathier environment by making their dealerships worth more. It is also easier to control a smaller dealership base in terms of supply, distribution, etc. Just a couple reasons I can think off right of the top.