gt-2

....the small marketing allowance provided back to dealers doesn't come close to what most stores spend in net ad money spent per unit.

hf1

No one's saying dealers should be banned or sent to concentration camps. Just allow everyone to sell to whomever they want -- dealers, customers, or both. Apple doesn't seem to have a problem selling iPhones directly to customers AND to dealers/operators/others. Plenty other products being sold both to dealers and directly to customers. How are cars any different?

I don't understand what you mean by "pull it off". Getting rid of the dealer franchise 'law' (aka extortion racket)? Yes, that would be hard to "pull off", nevertheless it IS the root of the problem and nothing else.

gt-2

Its simple.....iPhones are a couple hundred dollars to carry in inventory a piece vs a Porsche? You're not sure why? Extortion racket....funny I have benefited many times based on dealers fighting each other for a deal. No more fight when Porsche sells at same price to everyone, and it's arguable that competition will help much in to consumer prices from manufacturers. Everyone's issue here is simple, flipping cars for profit and it's Porsches beef also

WernerE

+1. It's clear the franchise system has been very good to consumers. Be careful what you wish for (i.e. Direct sales model). Too, dealers are doing EXACTLY what manufacturers wants its dealers to do via incentive programs.

WernerE

Correct. And it's laughable that dealers are "signing up for such programs." The factories are IMPOSING these conditions upon dealers. If trends continue, your local dealer will operate exactly how a factory-operated store would run, including selling cars at MSRP, which is HIGHER than what most people pay, Porsche GT cars notwithstanding.

hf1

I think I'll just stop repeating myself. I feel like I'm speaking Mandarin in a Latvian beer bar. You can bring the horse to water, but you can't make it drink.

gt-2

stop trying to sell tainted water and some might drink

WernerE

What pays for the $10M+ facilities (and that's before land cost)? Who pays for the personnel? Who pays for the technician training? Tools? This wouldn't be *free* to the manufacturers anymore than it is to the dealers.

Did any of you realize that dealers make 1% to 4% net on total sales? The ROI is fine if you're selling the right brand, doing many things right, the product cycle is new, and you're jumping through all the manufacturer hoops to earn incentive money. If not, you can lose money hand over fist.

bronson7

Late to this thread, but this I agree with. GT3's should be an easy get.

hf1

Yes, that's why there are dozens of dealerships sitting for sale for years on Ebay for $0.01. No one wants them because they're such awful gigs. State rackets are dime a dozen these days, it seems.

For the third time, no one is suggesting that dealers be banned -- just that producers be allowed to sell to whomever they want which is now prohibited by 'dealer franchise laws'.

STG

What dealer would buy a franchise and invest $10 million in a dealership if the manufacturer could still sell direct to customers and bypass them???

Ummmmmm ... really?

sccchiii

You seem like you are trying to make a good point and it should be respected but doesn't hold much credence because it can't co-exist. If dealers are the ultimate sellers to consumers then what are you saying, do away with franchise laws and pick and choose as a manufacturer who you get to sell to? So the manufacturers get to pick which products they want to sell to ultimate consumer and leave the dealers to just sell the tough inventory that isn't moving quickly? Really? How much value would exist to invest in big dealership expenses to bring the level of treatment we all demand? You think any dealer would stay in business? You think the manufacturer would be around long after the dealers are gone when they have to sell the cream of the crap products? I think I speak for many dealers in saying they are open to change the sales model (or modify it) but your wishes aren't realistic. What are you trying to accomplish and what will it solve? Times are great for dealers right now....most are netting before taxes (as was pointed out earlier) 3.5-4.5% of total sales and some even higher but please believe me...times will change and auto business has been up and down since it started. Dealerships are selling at all time highs as crazy multiple on earnings because the car business is red hot NOW!? Lets review this again in 10 years and lets see how many want to pay the current record multiple on earnings for a car dealership. Times won't always be like today and things will be tough again. It only takes a small world event to destroy consumer confidence and send car business into turmoil tomorrow (especially with pressure already showing on SAAR and Trumps position on german auto companies), so dealerships won't always be printing record cash flow!

hf1

That's exactly my point. I think you got it. A dealership is much less attractive without the 'franchise law' racket.

McDonalds is a franchise, yet there's no 'burger franchise law' prohibiting the sale of burgers without one. It must be because burgers are cheaper than Porsches.

dark knight

easy to fix problem, just like Ford did with GT, you get the allocation, you pick the dealer. problem solved.

sccchiii

Again not a good example...

A) If burgers are sports cars you currently have same choice of different manufacturers burgers....If you don't want a Porsche burger then go buy a Lamborghini burger?

B) franchise laws still exist for Mcdonald's as burger builder? Mcdonald's can't set up a factory shop in adjacent land next to a franchise Mcdonald's without lots of problems for Mcdonald's? For good reasons I might add?

Wow its getting deep in here with outlandish examples that don't make a valid point?