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Interesting take on the auto industry!
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RARE-ASC



Joined: 18 Dec 2004
Posts: 1198
Location: Canton Ga

PostPosted: Wed Jul 01, 2009 5:52 am    Post subject: Interesting take on the auto industry! Reply with quote

I found these comments and thought for sure it was Sandy but can't give him credit because the guy said he was 67! lol! Seems like the author nailed it!


"I’m 67, have followed the car industry for years, worked for a major machinery company for 33 years and as a consultant for the past 4 years. I know manufacturing, dealerships and customer expectations. With over 38 years experience here is what I know:

America needs car dealerships in small towns. Those who argue that more selection, better service and lower prices come from large locations have no idea how the industry works or what they are talking about. The best service, prices and customer satisfaction come from mid to small sized dealerships…proved over and over. The idea that bigger is better is for those who think what they observe are facts. They are simply wrong.

Bigger dealers actually limits competition. Every person in the industry knows that….writers and journalists are the only ones that don’t get it.

Small town dealers charge anywhere from $80 to $100 per hour. Big dealers, $100–$140. Again studies confirm.

Smaller dealers rely on satisfied repeat customers. Big locations care only for the immediate sale…ONLY. This generates the abuse of customers for which car dealers are famous. This abuse does not come from smaller locations…they simply can’t afford one dissatisfied customer.

Writers and journalists feed the citizens baloney about the car companies….they do not understand what a complex and difficult business it really is. For them to be critics of the industry is one of the great acts of hypocrisy forced upon the American reader.

Those who know the industry and I do, know that car companies would come out of the current slump if the government would loan money, with the expectations of getting it repaid with interest, to the car companies.

We know that the minute car manufacturers reach their factory break even points, the profits flow quickly. We also know that the volume of cars needed to reach break-even points is not that far from the loss point…in other words, with government help to the consumer and company, the companies become enormous tax payers and pay back loans quickly.

BTW when GM and Chrysler were profitable they paid as much as 33 Billion dollars a year in taxes, more than all the bailouts requested for these companies combined. That means if the gov would stimulate the consumer and the companies money flows almost instantly to relieve the problems.

Simple principles of economics obviously lost on the current administration."
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Sandy



Joined: 26 Aug 2004
Posts: 6205
Location: Northern New Jersey GSP Exit 148

PostPosted: Wed Jul 01, 2009 12:49 pm    Post subject: Reply with quote

No, it was not me, but he is 110% correct! He knows what he is talking about. There is more, however, but he, like I, cannot say it or "go there" as we do not want to wind up dead.
There is bookeeping....and then there is AUTOMOTIVE bookeeping, which sadly lends itself to hiding money, which in turn is attractive to the underworld.

How to buy a new car:

Seek out the smallest dealership selling what you want.
Go on-line to www.kbb.com and price out what you want.
Arrive at the dealership with knowledge, with fact! Do your
homework. There are hidden fees assesed against each
car, to the dealer, that KBB has no clue about. Add $300 for that
and add around $400 profit. That should put you in the driver's seat.

Look at the inventory of the big mega whopper highway store
to see colors, etc. Do it on Sunday, when they are closed.
Buy on "Monday" at the small in-town, old dealer.

and you'd never ever believe how rotten they treat their salespeople at the big whore houses!

It's not about how much you pay, it's about how you are treated, and how good the service is. It's also about who your money is supporting and how they dictate to yoiur salesmen how he/she will treat you! Honest, or dishonest. YOUR salesman does NOT make THAT decession!!!!!!!!!!
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negusm
Site Admin


Joined: 25 Aug 2004
Posts: 5183
Location: Charlotte, NC

PostPosted: Wed Jul 01, 2009 2:09 pm    Post subject: Reply with quote

While the statements above about small car dealerships may be true, they don't make the car companies enough money. Too many small dealerships are a drain on them. There is too much competition among each other.

GM is in the process of moving their production to Russia/China. They have no choice but to try and sell cars like the foreign makers because the government here is not willing to make the foreign automakers play on an even playing field.

The trade policy in the country is atrocious. It is geared to move manufacturing jobs out of this country as fast as possible.

Clinton really kicked the ball hard with NAFTA and the Republicans picked it up and ran it in for a TD.

-Mike
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shelbyscarab



Joined: 18 Jul 2006
Posts: 1009
Location: The Buckeye State

PostPosted: Wed Jul 01, 2009 3:59 pm    Post subject: Re: Interesting take on the auto industry! Reply with quote

RARE-ASC wrote:

"I’m 67, have followed the car industry for years, worked for a major machinery company for 33 years and as a consultant for the past 4 years. I know manufacturing, dealerships and customer expectations. With over 38 years experience here is what I know:

America needs car dealerships in small towns. Those who argue that more selection, better service and lower prices come from large locations have no idea how the industry works or what they are talking about. The best service, prices and customer satisfaction come from mid to small sized dealerships…proved over and over. The idea that bigger is better is for those who think what they observe are facts. They are simply wrong.

Bigger dealers actually limits competition. Every person in the industry knows that….writers and journalists are the only ones that don’t get it.

Small town dealers charge anywhere from $80 to $100 per hour. Big dealers, $100–$140. Again studies confirm.

Smaller dealers rely on satisfied repeat customers. Big locations care only for the immediate sale…ONLY. This generates the abuse of customers for which car dealers are famous. This abuse does not come from smaller locations…they simply can’t afford one dissatisfied customer.

Writers and journalists feed the citizens baloney about the car companies….they do not understand what a complex and difficult business it really is. For them to be critics of the industry is one of the great acts of hypocrisy forced upon the American reader.

Those who know the industry and I do, know that car companies would come out of the current slump if the government would loan money, with the expectations of getting it repaid with interest, to the car companies.

We know that the minute car manufacturers reach their factory break even points, the profits flow quickly. We also know that the volume of cars needed to reach break-even points is not that far from the loss point…in other words, with government help to the consumer and company, the companies become enormous tax payers and pay back loans quickly.

BTW when GM and Chrysler were profitable they paid as much as 33 Billion dollars a year in taxes, more than all the bailouts requested for these companies combined. That means if the gov would stimulate the consumer and the companies money flows almost instantly to relieve the problems.

Simple principles of economics obviously lost on the current administration."


Great post David.

About the ".... journalists & writers" comment, its not really a matter of them not "getting it" (although I'm sure some don't), its a matter of a certain agenda they have... Evil or Very Mad Rolling Eyes
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Rainmanoly



Joined: 27 Jun 2009
Posts: 124
Location: Kingwood

PostPosted: Wed Jul 01, 2009 4:06 pm    Post subject: Reply with quote

Ok, when you guys say "Small Town Dealership," are you talking about a small dealership in NJ, MD, or WV? I agree that small town dealerships are where to go for service. They tend to keep mechanics employed longer and treat them pretty well. That ladies and gentelmen results in high-quality-service. I live in snow country. Do you know how many AWD Mercury Sables, Ford Five-Hundreds/Taurus (Note: the ford flex is the same chasis) are running around here. The mechanic at the Ford dealership is the "man." He know his vehicles like the back of his hand. That is how a dealership in a town like Kingwood, WV, population 3800, makes money. Service, not sales.

But I disagree 100% about purchase price. The Big Dealers in Cleveland, Pittsburgh, and Annapolis are always, always, always cheaper than local. There are 3 reasons why. The dealership makes money 3 ways when selling a car. 1.)Financing/Interest rate and term 2.)Price of car 3.)Trade In Value... (Don't include down-payment. I am 35 years old and have never made one and I never will. The rebate, trade-in, cash back are my down payment) I do my home work before I go buy any car. What is MSRP? What rebates incentives are available? What is my trade in worth. What is my credit score, thus what is my interest rate and term. I then come up with a monthly payment that I expect to pay for the car and then subtract a minimum of 25 dollars a month from the monthly payment. The big dealer has more options than a small one. They have more than one bank to do financing, the bank gives them deals due to sheer volume, they can eat more on the trade in, and God help them if the car is a left over. If they can't meet the monthly payment and term I want then I walk. Wait a couple of months and my phone always rings.

The Big Dealer can screw you hard if you haven't done your homework on any of the three "money makers," but when they have to move cars, you have more power and more options.

PS
I apologize for my bad spelling and grammer.
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shelbyscarab



Joined: 18 Jul 2006
Posts: 1009
Location: The Buckeye State

PostPosted: Wed Jul 01, 2009 4:19 pm    Post subject: Reply with quote

negusm wrote:
While the statements above about small car dealerships may be true, they don't make the car companies enough money. Too many small dealerships are a drain on them. There is too much competition among each other.

GM is in the process of moving their production to Russia/China. They have no choice but to try and sell cars like the foreign makers because the government here is not willing to make the foreign automakers play on an even playing field.

The trade policy in the country is atrocious. It is geared to move manufacturing jobs out of this country as fast as possible.

Clinton really kicked the ball hard with NAFTA and the Republicans picked it up and ran it in for a TD.

-Mike


About the number of dealerships that government motors and Fiarysler have, many of those dealerships have been around for 30-40-50-60 years when there WASN'T any foreign competition to speak of and the formerly Big 3 had a very large piece of the pie, if not all of it. With the explosion of japanese & korean cars in the U.S. market the last 25 years, the 6,000+/- dealerships that gm had is unsustainable. same with fiarysler.

Another issue is the ridiculous handicaps that gm/fiarysler/Ford have to deal with trying to sell a car in many other countries compared to japanese/korean makers coming here and selling with no restrictions. This should be an equal/fair playing field.

And lastly, the now little 3, have had to carry on their backs RIDICULOUSLY high costs to build its cars that have skyrocketed the last 20 years. The bankuptcy laws should have taken care of this albatross, but conveniently our laws were bypassed to payoff/bailout(Thank) a certain group for support on nov. 4th, 2008. Mad
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ProTouringASC



Joined: 18 Sep 2006
Posts: 352
Location: Lenoir City, TN

PostPosted: Thu Jul 02, 2009 10:05 am    Post subject: Reply with quote

negusm wrote:
While the statements above about small car dealerships may be true, they don't make the car companies enough money. Too many small dealerships are a drain on them. There is too much competition among each other.

GM is in the process of moving their production to Russia/China. They have no choice but to try and sell cars like the foreign makers because the government here is not willing to make the foreign automakers play on an even playing field.

The trade policy in the country is atrocious. It is geared to move manufacturing jobs out of this country as fast as possible.

Clinton really kicked the ball hard with NAFTA and the Republicans picked it up and ran it in for a TD.

-Mike


How does a dealer cost the car company any money? The dealer owns his own land, or leases it from whomever does own it. A dealer owns his own inventory, or he floorplans it through either the manufacturer or a local bank. He pays for everything from the sign out front to the paper floor mats!

The best I can tell, the only reason the current administration wants fewer GM and Chrysler dealers is so Toyota and Honda can sell more cars...

Shiny Side Up!
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Sandy



Joined: 26 Aug 2004
Posts: 6205
Location: Northern New Jersey GSP Exit 148

PostPosted: Thu Jul 02, 2009 12:58 pm    Post subject: Reply with quote

Just want you to know two thngs:

1) Recently the largest ship that China uses ported in N.Y. The crew of 80 needed a week to unload all of the Made in China goods that were on board. When the cargo ship was empty, it set sail for home, empty.

The new example of Obama "Free Trade" ? The ship's fee for docking, was indeed waived! It took back NO American product !

2) Free trade is killing America. I cannot wait for Mitch to move into the Blight House along with Sara.
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Sandy passed away in 2012. He will be forever missed.

1990 Final Car prior to the 12 Silver Anny Editions
1990 Silver Pearl Anny Edition
1986 Coupe Full Pkg #109 of 114.

http://public.fotki.com/ascmclaren/ascmclaren_capris/sandys_mclarens/


Last edited by Sandy on Thu Jul 02, 2009 3:23 pm; edited 1 time in total
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Sandy



Joined: 26 Aug 2004
Posts: 6205
Location: Northern New Jersey GSP Exit 148

PostPosted: Thu Jul 02, 2009 1:16 pm    Post subject: Reply with quote

By the way, Japan is not allowing ANY American Cars to be imported , other than 1970-1980 "Muscle Cars" - Neat, right? Get out Muscle cars outta our country, as they are worth something, but import NO American cars, to hurt sales of their cars.

Even China allows our cars in.

Go ToyoPET, go Piss-On, go honDUH Anihilate
_________________
Sandy passed away in 2012. He will be forever missed.

1990 Final Car prior to the 12 Silver Anny Editions
1990 Silver Pearl Anny Edition
1986 Coupe Full Pkg #109 of 114.

http://public.fotki.com/ascmclaren/ascmclaren_capris/sandys_mclarens/
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plumkrazy



Joined: 27 Jul 2005
Posts: 1126
Location: Ann Arbor Michigan

PostPosted: Thu Jul 02, 2009 1:18 pm    Post subject: Reply with quote

Lets not forgot that alot of that Chain stuff is here because of Billy Mays and Dollar Tree/General
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plumkrazy



Joined: 27 Jul 2005
Posts: 1126
Location: Ann Arbor Michigan

PostPosted: Thu Jul 02, 2009 1:20 pm    Post subject: Reply with quote

Sandy wrote:
By the way, Japan is not allowing ANY American Cars to be imported , other than 1970-1980 "Muscle Cars" - Neat, right? Get out Muscle cars outta our country, as they are worth something, but import NO American cars, to hurt sales of their cars



Maybe after they buy all the old cars we can sell them OIL to run them.
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shelbyscarab



Joined: 18 Jul 2006
Posts: 1009
Location: The Buckeye State

PostPosted: Thu Jul 02, 2009 3:10 pm    Post subject: Reply with quote

plumkrazy wrote:
Sandy wrote:
By the way, Japan is not allowing ANY American Cars to be imported , other than 1970-1980 "Muscle Cars" - Neat, right? Get out Muscle cars outta our country, as they are worth something, but import NO American cars, to hurt sales of their cars



Maybe after they buy all the old cars we can sell them OIL to run them.


.... if we DRILLED for our own oil here, maybe we could!
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Rainmanoly



Joined: 27 Jun 2009
Posts: 124
Location: Kingwood

PostPosted: Thu Jul 02, 2009 4:48 pm    Post subject: Reply with quote

It's not even close to an even playing field. If a guy dies in a plant in America, how big is the settlement? At least $250,000? In China, less than $2,000/man. What about the EPA. Do you know what it costs just for a permit to discharge condensate/yr in the US? Let alone some of the more hazardous stuff needed for plastic, fiber glass, on and on. And don't get me started on my real passion, Socializing medicine. The only people that think this country's medical system is the best in the world are people who have never had a serious medical condition.
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shelbyscarab



Joined: 18 Jul 2006
Posts: 1009
Location: The Buckeye State

PostPosted: Thu Jul 02, 2009 5:01 pm    Post subject: Reply with quote

Rainmanoly wrote:
It's not even close to an even playing field. If a guy dies in a plant in America, how big is the settlement? At least $250,000? In China, less than $2,000/man. What about the EPA. Do you know what it costs just for a permit to discharge condensate/yr in the US? Let alone some of the more hazardous stuff needed for plastic, fiber glass, on and on. And don't get me started on my real passion, Socializing medicine. The only people that think this country's medical system is the best in the world are people who have never had a serious medical condition.


..... "if a guy dies in a plant". Well, is it always the companies fault? maybe sometimes, but don't tell me its never because of stupidity. I've heard of and seen way too many instances in the construction industry of injuries or death due to incompetence. But heaven forbid we ever declare this the case when the investigation ends. Companies just pay up and prices go up...

and I'll stay away from the socialized medicine issue also...... Rolling Eyes
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negusm
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Joined: 25 Aug 2004
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Location: Charlotte, NC

PostPosted: Thu Jul 02, 2009 6:44 pm    Post subject: Reply with quote

shelbyscarab wrote:
plumkrazy wrote:
Sandy wrote:
By the way, Japan is not allowing ANY American Cars to be imported , other than 1970-1980 "Muscle Cars" - Neat, right? Get out Muscle cars outta our country, as they are worth something, but import NO American cars, to hurt sales of their cars



Maybe after they buy all the old cars we can sell them OIL to run them.


.... if we DRILLED for our own oil here, maybe we could!


We don't have enough oil to bother to drill for. The only reason the topic is that big oil knows they can probably pick up a few extra $$ for free since they could get the drilling rights for free, the permits for free and probably subsidies to drill for free.

If we did drill seriously for oil, do you think YOU would see any $$ from it? The people in charge would figure out how to divert all of it to the oil corporations or their own pockets.

Think "state education lotteries". They claim to put money into the education system but once established, the education system's current budget is either frozen or slashed by the amount the lottery is expected to provide. So where did all that money really go?

-Mike
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