Topic: Sales per dealer in Canada

[dorin]

Does anyone have numbers for how many vehicles dealers sell in Canada?  I'm curious what the impact of the GM and Chrysler dealer cuts is going to be on the remaining dealers?  Are they likely to sell more cars per dealership and thus become more profitable?  Do Japanese-nameplate dealers sell more cars per dealership than Detroit-nameplate dealers?

[ovr50]

Do Japanese-nameplate dealers sell more cars per dealership than Detroit-nameplate dealers? 

Generally, yes, but don't have handy the stats to back that up. 

[toolatecrew]

Does anyone have numbers for how many vehicles dealers sell in Canada?  I'm curious what the impact of the GM and Chrysler dealer cuts is going to be on the remaining dealers?  Are they likely to sell more cars per dealership and thus become more profitable?  Do Japanese-nameplate dealers sell more cars per dealership than Detroit-nameplate dealers?

Situations will be different (IMO) for Chrysler and GM dealers.

Chrysler will have fewer dealers but same number of brands and models (more actually when they bring Fiats) so if you had two dealers in a town each selling 1000 Chrysler,Dodge Jeeps and you close 1 then it would seem to me that at minimum the left over dealer would sell 1001 Chrysler,Dodge Jeeps  probaly more.

If you had 2 GM dealers 1 selling Chev Caddy 1000 per month   the other Pontiac Buick GMC selling 1000 per month. Well now the pontiac dealer only sells 500 a month becuase pontiac is gone. A lot will depend on if people who used to buy Pontiac simply switch to Chev at the remaining dealer. WIll the remaining dealler also get the Buick and GMC sales ?

XXXXX  import's239 dealers across the country sold an average of 875 cars and trucks in 2008, far more than any other company, statistics from DesRosiers Automotive Consultants showed yesterday.

http://www.wheels.ca/article/495657

Name of company removed to prevent turing the thread into something other than what is intended. If you click the link you can read the name.

[johngenx]

So, if total sales are down, how can sales per dealer be up?  Are there fewer Toyota dealers suddenly?  This makes little sense...

[toolatecrew]

So, if total sales are down, how can sales per dealer be up?  Are there fewer Toyota dealers suddenly?  This makes little sense...

Who said sales per dealer are up?

The quiestion was "Do Japanese-nameplate dealers sell more cars per dealership than Detroit-nameplate dealers?  "

the answer to that is generally yes. They sell the same amount of cars as BIG 3 but had fgewer dealers to start with.

[dr_spock]

Couldn't you get an average number sold per dealership by taking the total sales and dividing it by the number of dealerships?

[PJungnitsch]

Exactly, I did that a while ago.

Jan 08 Car sales/dealer

Ford 4.0
Chrysler 8.7
GM 16.5
Toyota 27.3

Sales are easy to get from Sir A's figures, dealer #'s are harder to find.

[Patate]

Exactly, I did that a while ago.

Jan 08 Car sales/dealer

Ford 4.0
Chrysler 8.7
GM 16.5
Toyota 27.3

Sales are easy to get from Sir A's figures, dealer #'s are harder to find.

No dealer can survive selling 4 cars per month

In January 2008, Ford sold 12 372 vehicles(Ford the division, only)
                       Chrysler group sold around 17 000
                        GM sold 26 500

Your numbers said Ford sold 2862 cars.. which isn't far from the truth, but you forgot to consider the LIGHT TRUCKS.

Also, since when do people generalize the entire year with January numbers?  Winter months have very low sales numbers, let alone a good car/vehicle ratio.

There are way too many flaws on this document. I suggest you clear out that waste of hard drive memory.

[PJungnitsch]

That's just a cut and paste from car (not car + truck) sale calculation made over a year ago. The spread sheet is posted so someone else can do the work now.

[tenpenny]

No dealer can survive selling 4 cars per month

[/quote]

On a newscast I saw today, they mentioned that 1100 GM dealers are responsible for only 7% of their new car sales, and some dealers only sold 35 new cars PER YEAR.

[dr_spock]

Those dealers could be making money from other things besides new car sales.  There is not much profit margin in new car sales after we negotiate down the MSRP close to invoice. 

[Leviathan]

Dunno if this helps  but this

was in this article: GM whacks 1,100 dealers

[Patate]

No dealer can survive selling 4 cars per month

On a newscast I saw today, they mentioned that 1100 GM dealers are responsible for only 7% of their new car sales, and some dealers only sold 35 new cars PER YEAR.


[/quote]

Those dealers look like mafia fronts if you ask me.

As for Leviathan posts, thanks for those numbers.  Even if they're US numbers, we could use them.  I've said it many times: the number of dealers represent a problem for Detroit 3 automakers.  They had to do something, they do not own 80% of the market anymore. 

[toolatecrew]

Those dealers could be making money from other things besides new car sales.  There is not much profit margin in new car sales after we negotiate down the MSRP close to invoice. 

You say it tongue in cheek but its actually true.

Used car sales have much bigger margins than new car sales.
The $s in parts and service are huge. Not just parts for the cars they serve but selling body parts for examples to independent shops who can't buy the parts direct. Independent repairers are still blocked from performing some critical functions and repairs so the car often has to "go back to the dealer" for one thing even if 99% of the repair can be done elsewhere (reset ABS warnings for example)

Many dealers also have a body shop operation connected to their dealer. This also can be a large profit generator. The equipment needed is usually much less specialized than service. Body technicians are paid much less than mechanics. Often a company that owns several dealer brands will filter it all through one body shop making the overhead much less than separate service bays for each brand.

I agree a stand alone independent dealer couldn't survive selling 4 cars a month but it seems that in many areas there are no more independent dealers. They are owned by a dealer group.

[dougjp]

Guys, in the US there are dealers that are multi brand. While they don't sell more than one of the "big 2.8" under one roof/location, they may also sell Hyundai, VW, BMW Kia or whatever. Sales of GM products at some of those "dealers" became insignificant over the years and yet supporting their existence via shipment costs for cars, parts plus manuals and training etc. make them big losers from just one manufacturer's perspective. The natural question is why did they keep those dealers so long? US franchise laws protected those dealers. So cutting 1/6 of US dealers of which a big part are <35 sales per year has relatively little effect on employment or the local communities.

Contrast that with north of the border, and.....wow. 43% reduction in dealers despite most if not all of those just selling GM products and you (better) realize how Canada is being intentionally shafted. That's the retail side, how about manufacturing? Do any of you really think our past percentage of manufacturing numbers and auto manufacturing employment vs. the US will be retained, despite us paying 2X per capita what the American taxpayers are paying towards the GM and Chrysler auto restructuring? I see a lot of comments that suggest many don't realize what's going on. Then again, maybe the best thing to do is go get a beer and forgetaboutit. 

[Patate]

Those dealers could be making money from other things besides new car sales.  There is not much profit margin in new car sales after we negotiate down the MSRP close to invoice. 

You say it tongue in cheek but its actually true.

Used car sales have much bigger margins than new car sales.The $s in parts and service are huge. Not just parts for the cars they serve but selling body parts for examples to independent shops who can't buy the parts direct. Independent repairers are still blocked from performing some critical functions and repairs so the car often has to "go back to the dealer" for one thing even if 99% of the repair can be done elsewhere (reset ABS warnings for example)

Many dealers also have a body shop operation connected to their dealer. This also can be a large profit generator. The equipment needed is usually much less specialized than service. Body technicians are paid much less than mechanics. Often a company that owns several dealer brands will filter it all through one body shop making the overhead much less than separate service bays for each brand.

I agree a stand alone independent dealer couldn't survive selling 4 cars a month but it seems that in many areas there are no more independent dealers. They are owned by a dealer group.

Ok, but how do they get used cars on their lots? Trade-ins.  How do they get trade-ins? they sell new cars.

Other than that, maintenance and repairs are the bread and butter of car dealers.  The problem is, if a dealer sold 4 cars per month, it is wise to think they don't service many people, nor sell lots of used cars.

[WpgMonty]

Those dealers could be making money from other things besides new car sales.  There is not much profit margin in new car sales after we negotiate down the MSRP close to invoice. 

You say it tongue in cheek but its actually true.

Used car sales have much bigger margins than new car sales.The $s in parts and service are huge. Not just parts for the cars they serve but selling body parts for examples to independent shops who can't buy the parts direct. Independent repairers are still blocked from performing some critical functions and repairs so the car often has to "go back to the dealer" for one thing even if 99% of the repair can be done elsewhere (reset ABS warnings for example)

Many dealers also have a body shop operation connected to their dealer. This also can be a large profit generator. The equipment needed is usually much less specialized than service. Body technicians are paid much less than mechanics. Often a company that owns several dealer brands will filter it all through one body shop making the overhead much less than separate service bays for each brand.

I agree a stand alone independent dealer couldn't survive selling 4 cars a month but it seems that in many areas there are no more independent dealers. They are owned by a dealer group.

Ok, but how do they get used cars on their lots? Trade-ins.  How do they get trade-ins? they sell new cars.

Other than that, maintenance and repairs are the bread and butter of car dealers.  The problem is, if a dealer sold 4 cars per month, it is wise to think they don't service many people, nor sell lots of used cars.

Actually, most dealers stock the used car lots with auction purchases from ADESA and Manheim. Trade ins represent only a fraction of the used car business; in the case of the dealership where my wife works trade-ins are less than a quarter of their used vehicle inventory. The balance comes from the auction houses where they purchase low mileage lease returns.

[Cord]

Actually, most dealers stock the used car lots with auction purchases from ADESA and Manheim. Trade ins represent only a fraction of the used car business; in the case of the dealership where my wife works trade-ins are less than a quarter of their used vehicle inventory. The balance comes from the auction houses where they purchase low mileage lease returns.

All true. Except they aren't lease returns. They're ex-rentals. 

[Honda Owner]

No dealer can survive selling 4 cars per month

Exactly. This is why so many dealers are closing. GM is closing 245 (42% of all dealers) in Canada as soon as possible.

Ok, but how do they get used cars on their lots? Trade-ins.  How do they get trade-ins? they sell new cars.

You obviously do not have any dealership experience. Domestics almost always get their used cars at auction and they are almost always lease returns. A name brand dealer doesn't want anything more than three of four years old in their lot because they want to upsell the warranty package which has a fat margin on it. Trades tend to be more than five years old and get sent to auction or beater lots immediately. Old stuff comes back for repairs too much and this really kills the margin on them because customers are great at getting free stuff. The used car dept will eat a lot to quieten down an irate customer. A few experiences like this and anything over a few years old is not retailed. It's not worth the hassle.

[Cord]

No dealer can survive selling 4 cars per month

Exactly. This is why so many dealers are closing. GM is closing 245 (42% of all dealers) in Canada as soon as possible.

Ok, but how do they get used cars on their lots? Trade-ins.  How do they get trade-ins? they sell new cars.

You obviously do not have any dealership experience. Domestics almost always get their used cars at auction and they are almost always lease returns. A name brand dealer doesn't want anything more than three of four years old in their lot because they want to upsell the warranty package which has a fat margin on it. Trades tend to be more than five years old and get sent to auction or beater lots immediately. Old stuff comes back for repairs too much and this really kills the margin on them because customers are great at getting free stuff. The used car dept will eat a lot to quieten down an irate customer. A few experiences like this and anything over a few years old is not retailed. It's not worth the hassle.

And you obviously don't have any sales experience. Dealerships love trade ins. I know that we can never get enough older, cheaper cars to sell. The cars bought at auction are mostly 1-2 years old not 3-4 years old and they are mostly company buy-backs (rentals), followed by lease returns and repos. The main issue with older trades is the inability to finance them. That's why a dealership may shy away from relatively expensive older cars. A 7 year old $25,000 car is just a boat anchor on a dealer's lot. But cars that can be sold for $10,000 or less are pure gold. Selling warranties is a very minor consideration that would have zero impact on determining whether I keep a trade on the lot. The profit margin on a hard to find, good condition 5+ year old trade is often way more than the average one year old auction purchase. Old stuff is sold on an "as is" basis with no worry of comebacks. Only the worst of the worst (the sub $500 trades) gets wholesaled to the dirt lot operators.