Banango

And the best peaches in the world, bar none.

Jooyoung99

Thank you all for your information. I got a PM from a fellow Rennlister. The dealer offered $145K!!!. It's crazy. I was going to take $140K, but I'm glad I posted here. Saved myself extra $5K.

Banango

Good stuff, OP. So long as you are happy with the deal.

malmasri

I am giving mine to the dealer for much less than that, In appreciation to a no marked up RS

Jooyoung99

That's pretty good. Dealer that I sold my GT3 to is asking $130K over sticker. Basically, I need to give them my GT3 for free to buy an GT3 RS for sticker.

C.J. Ichiban

I'm a multi-brand dealer owner. How can I help you?


1)With volume stores you generally turn your new inventory so fast it never touches the ground. A huge (top 50 nationwide) Honda or Toyota store for instance will sell 200-500 cars a month and has trucks dropping inventory off twice a week. Because of this, they accumulate floor plan credits with the captive lender. They also don't have to spend a lot of time with customers- it's like BestBuy at the holidays

2)Floor plans work like this: the bank lends you a set volume of money and you book each car individually against that. With mazda we get credits if we sell a car within a set time period. Dealers at huge stores like Galpin eventually just blow out their inventory just to get the back end from the lender, and try to make up the profits on financial packages or accessories etc. generally a volume dealer has the power to also retain their customers better % wise because the customer just sees the price of the car and trades in and does it all again. They feel like a winner.

3) lets not forget individual salesperson commissions- there are many layers of commissions booked into that theoretical 10% turn on a used car. I have to pay my sales guy, and the used car sales manager sometimes has a bonus provision as well as the store GM via profit bonuses. There is also money to spend reconditioning the car so it looks nice and doesn't wobble at high speeds. So in a deal there are many leaky faucets potentially.


Every brand has challenges- being privy to actual sales data you see how well some stores do and how garbage the others are. Porsche has really high CI- corporate image- standards and that "minimalist" look to the showroom is not cheap. My BMW bike store has only one vendor for the specifically required ceramic tile flooring and if you think that is cheap to set up...NO DISCOUNT.

From a construction standpoint or refurbishing, dealers cost a lot of money to build. Almost as much as a luxury house due to being so equipment dense.

Alan C.

I had the opportunity to pick up a well optioned PTS RS with my car at $30k below MSRP. In hindsight ............

Banango

All else being equal, which would you rather be selling: a low volume, relatively expensive corporate identity and high consumer expectation aspirational brand, or a high volume, relatively simpler CI, more prosaic brand (knowing that in reality all consumer expectations are high)?

I could just wait to see what other marques you add to your sales stable, but there are more reasons for selling some brands than just the money they directly make. A Ferrari dealership can be an awfully good draw for a Chevy dealer who ends up selling scads of Corvettes!

C.J. Ichiban

Lost in the simplistic nature of the question is the difficulty of obtaining ANY franchise. Since I am typing on my phone I don't know your location but will put some insider subjective info and objective facts:

In 2011 or 2012, crevier BMW in santa ana, CA sold for 121,000,000. One store. That is a hugely successful store, so lets assume it was bought at a 10x multiple and the land was 25M. So basically the store makes 10M a year. Guessing they have to sell 2-3k new cars a year at that price. Granted a lot of BMW cars are leased and turned back in so they might even sell 1000 CPO cars a year. Still- how deep do your pockets have to be to have a 80M floor line to sell the 300 cars a month, AND pay 121MM for the store. That's corporate conglomerate s**t.

I bought one of my mazda stores for mid six figures. It took 9 months then we turned it around and became a high volume (for mazda in the midwest) and very highly rated store. We also had to purchase a 4.5 acre parcel of land which was mid five figures. We sold about 900 mazdas in 2015 plus used and CPO cars, about 1500 total from that one spot.

So far I have four mazda dealers (sold mooty a '16 MX5) and six moto franchises. Our group has been 100% me with no outside investors, and other than my ventura store I have the land also.

If I sold all my holdings to one group it would not be worth enough to get a really nice (big/profitable/ideally located) BMW, MB, store. Most Porsche franchises are now owned by a massive corporation (Penske in Scottsdale for instance, Auto Nation Newport Beach, or Martin's favorite: Auto Gallery which is a subsidiary of a dealer chain of 50+ stores) and generally they won't sell.



Lots of space in between those two examples but basically you need full on cossa nostra connections for a Ferrari store, money cannot buy it. Volume on a ferrari or lambo or mclaren store is 15-150 units per year.

Who knows maybe one day Porsche will see how much I care about the brand and help me do a deal on a store. Return power to the little guy.

My top 5 target brands are Ford, Honda, Porsche, VW and Subaru. Bmw and MB seem too big to acquire, too many hoops and all owned by huge groups. All customers want is a positive product experience and a gracious aftersales experience. Mazda is the enthusiast brand of the imports so it's nice to have them and to be one of the country's best Mazda dealers. However, the future holds more marques. I also want brands I can race and rally with.

Gotboost?

Spot on CJ... Most folks don't understand the dollars required to build and operate a dealership. Let alone the small net to sales percentages we work with. We are in the process of planning a construction project for my Lexus store and the construction cost is in the 8 figures without the dirt.. That's just a remodel/expansion!

I would caution you on Honda, VW, & Ford stores unless you can acquire them real cheap. Razor thin margins and a lot of brain damage to make little $$. (depending on the market of course) I'm sure your Ventura store is a whole different animal than your other stores in other states...


BTW.. We are headed down to AZ in March on a sponsors trip. See you there!

C.J. Ichiban

Want a partner on that lexus dirt? Lol

Gotboost?

Not on the Lexus point, but maybe if I get a Porsche point..

Banango

Thank you for the detailed and generous response...

NY

Indeed, and I think that supports my argument that dealers do have good reason for needing to take large profits when they can.

This is a separate issue from one of attitude. Martin's bete noir - Auto Gallery - is one I might opine has a bad attitude. It is not their Porsche arm with which I have experience, but the general view towards them on Rennlist comports what I saw working on the manufacturer's side with another brand. Interestingly, however, the way they are perceived to treat prospective customers mirrors the way I saw a manufacturer treat its dealers - including Auto Gallery.

I don't think you would enjoy having one of the former, and from what I have seen they are all run much the same.

I am pessimistic, despite good evidence that people with your attitude and enthusiasm are exactly what made and makes great dealerships and builds the manufacturers' brands, but thinking is now short term. I won't bore you and others with my detailed views on this. I suspect we are closely aligned.

Interesting to know. A great insight. Thanks.

signes

Some great info in those posts, CJ, thanks for posting.

Jooyoung99

Wow! The dealer that I sold my GT3 for $145K listed the car for $168K. I wonder if they really can sell it for $168K for 2014 $150K MSRP car.