Dealership closings in your area...?

[JWC]

We've been pretty slow at our dealership, but fortunate that we haven't fallen like some others.  The Ford website has at least two threads per month of techs or advisers saying good-bye as their dealer principles announce that the dealership is closing.

In my area, the Jeep-Mazda dealer laid off several employees and combined operations with their GM dealership.  A town 17 miles away, lost their Nissan dealership.  The dealer hadn't paid Nissan for autos shipped and Nissan shut them down and seized the inventory.  Another town near by, lost their Mazda dealership and the Volvo dealership has begun cutting back.   A local Chevy dealer has laid off techs and employees, while our nearest Ford competitor has laid off office personnel.

The last time I saw it this bad was in the early 1990's.  We lost our BMW, Volvo, and Subaru dealerships, plus nine Honda dealerships in the eastern area of NC.  None have returned. 

Besides car dealerships, this past week has seen several local companies begin closing plants or laying off several hundred employees.  These include Hatteras Yachts (layoffs), Fountain boats (layoffs), Electrolux (closed), Lennox China (closed), Gilbarco (closed--makers of gas station refueling nozzles). 

How is the economy affecting car dealers and companies in your area?

[Onslaught]

The Mazda dealer recently sold by my former employer is going under. It's just a matter of time.
Or Ford store was going to crash and burn but was purchased and saved for the time being. Time will tell with this one.
One of the other Ford dealers on the other side of town just died.
And one of the Toyota stores that just built a HUGE dealership with a massive 3 story parking deck just to hold some of the cars is really bad shape right now. They went a little too large at a bad time.
I also hear that the areas largest Ford dealer is almost in the grave as well.

I'm sure that others are in bad shape too. But these are the ones that I hear of the most. This isn't a good time to be in the car biz

[93JC]

Not a single car dealer has closed, that I know of. A few layoffs in other industries, particularly oil & gas. The company my mum works for (an engineering, procurement and construction company that mostly does oil upgraders and refineries) let 300 people go a couple months ago, and is preparing to fire a couple hundred more.

On the other hand I and everyone else at the firm I work for is ridiculously busy.

[Tave]

Our Chrysler dealer went out of business: surprise surprise.

[JWC]

This isn't a good time to be in the car biz

Nor the luxury boat biz either.

Gilbarco, the fuel pump company is closing their plant here and moving operations to their plant in your neck of the woods, Greensboro/Winston-Salem.

[sportyaccordy]

Haven't really been following new car dealerships... used car dealerships seem to be doing OK. My uncle works for Honda of Manassas in VA (I believe) and from what I hear he is doing OK.

With the economy being what it is though, carmakers really need to come up w/a new business model fast. It's not looking good at all.

Do dealership closings come w/good deals?

[Onslaught]

Nor the luxury boat biz either.

Gilbarco, the fuel pump company is closing their plant here and moving operations to their plant in your neck of the woods, Greensboro/Winston-Salem.

No, I would think that the boat biz would be hurting rather bad right now too.

[Onslaught]

How is the economy affecting car dealers and companies in your area?

I'm in Charlotte so just about everyone I know works for a bank. And they're all pissing their pants right now.

[Tave]

I need to call my homey at Oppenheimer. They were supposed to make their cuts sometime in January.

[JWC]

Haven't really been following new car dealerships... used car dealerships seem to be doing OK. My uncle works for Honda of Manassas in VA (I believe) and from what I hear he is doing OK.

With the economy being what it is though, carmakers really need to come up w/a new business model fast. It's not looking good at all.

Do dealership closings come w/good deals?

Almost all the used dealerships have shut down.  The only ones left are the ones that sold quality products and used real banks for financing.  The ones that specialized in "no credit--no down payment" have left the building.

Oh, I forgot.  The Kia dealership closed also.

[TBR]

I don't really know of any big employer in the Winston-Salem area that has closed or has made significant layoffs. But, back home a large industrial manufacturing company (Lufkin Industries) as well as my Dad's company has had to do some layoffs. Additionally, Pilgrim's Pride which is a huge employer in East Texas went bankrupt but I think it was related more to INS problems than the economy problems and, as far as I know, is still functioning.

[JWC]

Here is an interesting announcement we received Thurs or Friday at the dealership:

Ford Motor Company's longtime dealership sign provider, ImagePoint, has announced they are being forced to liquidate and have ceased doing business.  This will have an immediate impact on all Ford, Lincoln, Mercury and Quick Lane dealer sign projects and related Retail ID services.

ImagePoint was the employer of all Ford Retail Identification contact and customer service personnel. All services including permitting, manufacturing, shipping, installations, relocations, removals and maintenance ceased on Friday.

In addition to Ford, many companies are affected.  ImagePoint was the nation's largest sign company and provider of signage for over 75% of the automotive dealers (Ford, GM, Chrysler, Honda, Acura, Mercedes, Nissan, Infiniti, etc).  They also represented a broad range of national restaurants, fast foods, banks, gas stations and consumer products.

(from fmcdealer.com)

[omicron]

The opposite, in fact - there are three new dealerships going up along the one street in the city alone (Toyota, Subaru and BMW). I believe South Australia was the only state to achieve positive sales growth for the year.

[dazzleman]

A Ford dealer near me closed, but I don't think it was specifically related to the current bad economy so much as the longer-term decline in Ford sales that resulted in there being too many dealers within the area for the level of business.

Luckily, this Ford dealer (Miller Ford) was connected to Miller Nissan in the same building, so now the operation is just Nissan.  Previously, Miller Ford and Miller Buick were in the same building, and Miller Nissan was up the road.  But about 10 years ago, they switched the locations of Nissan and Buick, bringing Nissan to the main dealership to share it with Ford, and moving Buick up the road.  Eventually, they closed the Buick dealership, and replaced it with Volkswagen, which didn't last at all.  Then, they were selling used cars out of that dealership.  Now, the place is vacant.

[cozmik]

So far all the local dealerships are still operating, though I'm sure for many of them it's just barely. I don't know how my old dealership I used to work at is still there. The BMW franchise has to be supporting all the rest.

[dazzleman]

So far all the local dealerships are still operating, though I'm sure for many of them it's just barely. I don't know how my old dealership I used to work at is still there. The BMW franchise has to be supporting all the rest.

Some of them may be hanging on, hoping for better times in the future.

Economic recessions are like pneumonia.  They generally don't kill the healthy company, but they often do finish off the one that was sickly even before the recession.

[cozmik]

Some of them may be hanging on, hoping for better times in the future.

Economic recessions are like pneumonia.  They generally don't kill the healthy company, but they often do finish off the one that was sickly even before the recession.

Well, they weren't really the healthiest dealer before either. And they just spent a few mil on a new Honda showroom and service center, and redoing the main service center for BMW/GM/Volvo. Volvo has never been profitable, I don't think Jag has either. GM probably was at one point, don't know now. Honda could go either way, but I suspect they aren't anymore. They've been getting crushed. That leaves BMW basically. And they've been hurting too.

Interesting fact I learned the other day. BMW has no dealer holdback. The markup between invoice and MSRP is all there is.

[dazzleman]

Well, they weren't really the healthiest dealer before either. And they just spent a few mil on a new Honda showroom and service center, and redoing the main service center for BMW/GM/Volvo. Volvo has never been profitable, I don't think Jag has either. GM probably was at one point, don't know now. Honda could go either way, but I suspect they aren't anymore. They've been getting crushed. That leaves BMW basically. And they've been hurting too.

Interesting fact I learned the other day. BMW has no dealer holdback. The markup between invoice and MSRP is all there is.

I would expect Honda to recover, if they're not profitable right at this moment.  Probably BMW also.  I wouldn't be so sure about GM or Volvo, or Jag.

I guess BMW doesn't need dealer holdback, because their markups are so high.

[JWC]

Some of them may be hanging on, hoping for better times in the future.

Economic recessions are like pneumonia.  They generally don't kill the healthy company, but they often do finish off the one that was sickly even before the recession.

Quite true.  In the case of car dealerships, it is the service department that supports the dealership in hard economic times.   Many dealerships today seem to think of service as a necessary evil and rely on car sales to pay the bills.  I think the new breed of dealer  principles just saw themselves as a car salesman. 

The introduction of new cars to the U.S., Kia, Hyundai, and Daihaitsu for example, was limited to introductory models, marketed to higher risk clients and lower middle income until the marque develops an image of value and reliability.  Then you can start selling your higher end, higher priced models.  Those dealerships now tend to still rely on higher risk customers,  That probably is why you have one company offering to take back cars if you can't afford to make the payments or lose your job.

[dazzleman]

Quite true.  In the case of car dealerships, it is the service department that supports the dealership in hard economic times.   Many dealerships today seem to think of service as a necessary evil and rely on car sales to pay the bills.  I think the new breed of dealer  principles just saw themselves as a car salesman. 

The introduction of new cars to the U.S., Kia, Hyundai, and Daihaitsu for example, was limited to introductory models, marketed to higher risk clients and lower middle income until the marque develops an image of value and reliability.  Then you can start selling your higher end, higher priced models.  Those dealerships now tend to still rely on higher risk customers,  That probably is why you have one company offering to take back cars if you can't afford to make the payments or lose your job.

When times are good, people rely more on the 'sexy' but sometimes ephemeral aspects of the business, and forget the unsexy parts like service.  Then, when sales flatline, they have nothing to fall back on.

Lower middle class people could be solid customers, if they have managed their credit well and aren't buying something they really can't afford.  Of course, in recent years that has largely not been the case, right from the top to the bottom of the economic spectrum.

[MX793]

I don't know of any closings.  I do know that some of the larger dealership chains have been buying franchises from smaller ones.  Of course, there isn't a lot of redundancy in dealerships around here and there are a lot of brands that you have to drive an hour to get to the nearest dealership.

It does seem like some dealerships aren't stocking as much variety in their inventory.  The local Subie dealership still hasn't gotten any '09 WRXs in despite the fact that they've been on sale for months.  The fact that they still have an '08 on the lot that's been sitting there for at least a year might have something to do with that.

[JWC]

Along these sames lines, every contractor I know,  from landscape companies to housing contractors, are cutting back.  It is obvious when they walk in to the dealership that we are slow and I tend to ask them how their business is doing.     Every single one says that they are laying off people. 

In my area, I can only imagine it is due to one of two things...maybe a combination of both.  The tightening of credit and the reluctance of consumers to spend.   

The businesses that relied on high risk customers, like some of the used car dealers around here, have had their credit opportunities cut off by banks.   Before, customers filled out a credit application and the salesman faxed it to different banks until you found someone who would take on the risk.  That isn't happening anymore.  Since no one else was going to pay a premium for high mileage car, those dealerships closed.  This interrupts the flow of new cars too.   One way for a dealership to give a customer a high trade-in value was to depend on these other used car lots to buy them and help off set the trade-in allowance.  Without these used car dealerships being around to buy up these high priced trade-in, new car dealers can't unload and can't offer that great trade-in price.   

[r0tor]

I don't know of any closings but one chrysler dealer was having a "Buy1 Get one for $1" promotion.... sounds like its a matter of time for them

[r0tor]

It does seem like some dealerships aren't stocking as much variety in their inventory.  The local Subie dealership still hasn't gotten any '09 WRXs in despite the fact that they've been on sale for months.  The fact that they still have an '08 on the lot that's been sitting there for at least a year might have something to do with that.

a couple weeks ago subaru had $7k off a 2008 STi... I was trying to find one like crazy in my area but all the dealers were sould out... bah

[dazzleman]

Along these sames lines, every contractor I know,  from landscape companies to housing contractors, are cutting back.  It is obvious when they walk in to the dealership that we are slow and I tend to ask them how their business is doing.     Every single one says that they are laying off people. 

In my area, I can only imagine it is due to one of two things...maybe a combination of both.  The tightening of credit and the reluctance of consumers to spend.   

The businesses that relied on high risk customers, like some of the used car dealers around here, have had their credit opportunities cut off by banks.   Before, customers filled out a credit application and the salesman faxed it to different banks until you found someone who would take on the risk.  That isn't happening anymore.  Since no one else was going to pay a premium for high mileage car, those dealerships closed.  This interrupts the flow of new cars too.   One way for a dealership to give a customer a high trade-in value was to depend on these other used car lots to buy them and help off set the trade-in allowance.  Without these used car dealerships being around to buy up these high priced trade-in, new car dealers can't unload and can't offer that great trade-in price.   

The house of cards is collapsing all around us.  Next time, let's hope we build a sturdier house.  It may be smaller, but I'd rather have a smaller, more solid house than a big one that collapses.

[JWC]

Our new car lot is bare...I believe I counted 25 cars on the line.  That was practically what we sold new per month a year ago.  (Keep in mind we're a small dealership).

[SVT666]

No dealerships have closed, and business for our office is increasing.  We're looking to hire people.

[MX793]

a couple weeks ago subaru had $7k off a 2008 STi... I was trying to find one like crazy in my area but all the dealers were sould out... bah

Really?  The nearest dealer doesn't have their STI anymore, but I recall several other dealerships not too far away that still had '08 STIs.  If I could get one under 30K, I think I'd go for that.

[Raza]

One of the dealerships that had been around as long as I could remember closed down (I knew the owner's son very casually; he does have the distinction of having flipped a Mini Cooper...while driving it) some time ago.  It was before bailout fever, but it wasn't that far behind. 

It was a Pontiac dealer.  It's where I drove a GTO for the second time (the automatic one).

[Raza]

No dealerships have closed, and business for our office is increasing.  We're looking to hire people.

So, can I forward you my resume?