Ford turnaround pays dividends for dealers

[jpd80]

LINK

 

 

 

Great to see Ford's dealers recovering last year and back in the black.

[atomaro]

LINK

 

 

 

Great to see Ford's dealers recovering last year and back in the black.

 

 

Further proof not to believe the dealers when they tell you that they don't make much selling cars.

[Critic]

Ford Motor Co will launch a new small car for its Mercury brand in early 2011, based on the automaker's new global compact car platform, Ford President of the Americas Mark Fields said on Sunday.The new Mercury is one of the 10 vehicles Ford is planning for its global small car architecture, that also underpins the upcoming 2012 Ford Focus, and would expand the lineup of the mid-level premium brand long devoid of new products.

 

The launch also underscores the No. 2 U.S. automaker's support for the brand despite uncertainty in some analysts' views over whether Ford will keep the brand in the long term.

 

Fields unveiled the plan during a meeting with U.S. dealers at the annual National Automobile Dealers Association convention in Orlando, Florida.

 

U.S. sales for the Mercury brand fell 23 percent to 92,299 vehicles in 2009, while the overall market was down 21 percent. The company's flagship Ford brand sold 1.44 million units in the U.S. market in 2009, down 14 percent from a year earlier.

 

 

[Noah Harbinger]

Further proof not to believe the dealers when they tell you that they don't make much selling cars.

 

I didn't see any numbers quoted.... "15 times more profitable" could mean $15 profit instead of $1.

[Marginal Economist]

Further proof not to believe the dealers when they tell you that they don't make much selling cars.

 

Right around 50% of delaers did not turn a profit in 2008. I'd bet revenue did not increase in 2009, but that there were a ton of cost cutting measures. Dealers don't make much money, if any, selling cars. There is a reason for parts, service, and F&I.

[atomaro]

I didn't see any numbers quoted.... "15 times more profitable" could mean $15 profit instead of $1.

 

 

Highly unlikely.

[Noah Harbinger]

Highly unlikely.

 

But it exists with the realm of possibilities, at least as specified by that article... which is the entire point - it doesn't really say ANYTHING useful.

[joihan777]

Still wish there was a dealership in Elk Grove, CA.

 

How about a "Ford Factory Store?"

 

Hey Ford are you listening?

[move4ward]

Further proof not to believe the dealers when they tell you that they don't make much selling cars.

 

 

Many dealerships that were losing money in 2008 are out of business in 2009. There were 1,605 dealerships of all brands that went out of business last year. Many dealerships that had been open for decades, just disappeared.

 

If those dead dealerships survived 2009, it would have dragged down profits this so-called turnaround. The ones that did survive, are making all their profit from used car sales or parts & service, not from selling new cars.

 

If these dealerships were making so much money selling cars, they would still be around.

Edited February 15, 2010 by move4ward

[Noah Harbinger]

Many dealerships that were losing money in 2008 are out of business in 2009. There were 1,605 dealerships of all brands that went out of business last year. Many dealerships that had been open for decades, just disappeared.

 

If those dead dealerships survived 2009, it would have dragged down profits this so-called turnaround. The ones that did survive, are making all their profit from used car sales or parts & service, not from selling new cars.

 

If these dealerships were making so much money selling cars, they would still be around.

 

 

So your belief is that repair work and and used car sales decrease in a recession? Otherwise, why would the drop-off in new car sales have caused any dealerships to go out of business?

Edited February 15, 2010 by Noah Harbinger

[move4ward]

So your belief is that repair work and and used car sales decrease in a recession? Otherwise, why would the drop-off in new car sales have caused any dealerships to go out of business?

 

What I am saying is that the dealerships are making their profits almost exclusively from repair work, parts sales, and used car sales and not new car sales. There are higher margin on used cars and that helps off set the losses.

However, used sales have gone down every year , since the recession started in late 2007/early 2008. It's still a bloodbath out there. The economys picking up a little bit. Some folks are expecting sales to go back up to 39-40 million cars this year. It's still not close to the good times of 2005-06.

 

 

http://www.bts.gov/publications/national_transportation_statistics/html/table_01_17.html

 

(in millions)

2006

42.6

 

2007

41.4

 

2008

36.5

 

Note: The post originally said that some folks are expecting sales to go up to $39-40 million in used vehicle sales. I have corrected it to say 39-40 million cars.

Edited February 16, 2010 by move4ward

[Kev-Mo]

Still wish there was a dealership in Elk Grove, CA.

 

How about a "Ford Factory Store?"

 

Hey Ford are you listening?

 

 

I am with you on this - there has got to be a better way -

 

It boggles my mind, that every successful business has to re-invent itself every 10 years or so to stay competitive but we still buy cars the same way we did 50 years ago! Ford itself has had a complete business make-over in the last few years, but their dealers (at least in my area) are the same as they have always been.

[Noah Harbinger]

What I am saying is that the dealerships are making their profits almost exclusively from repair work, parts sales, and used car sales and not new car sales. There are higher margin on used cars and that helps off set the losses.

However, used sales have gone down every year , since the recession started in late 2007/early 2008. It's still a bloodbath out there. The economys picking up a little bit. Some folks are expecting sales to go back up to $39-40 mil this year. It's still not close to the good times of 2005-06.

 

 

http://www.bts.gov/p...able_01_17.html

 

(in millions)

2006

42.6

 

2007

41.4

 

2008

36.5

 

Huh... Used cars down 21.6%, new cars down 19.9% - I would have thought the total sales of used cars would have been even or up in response to the drop in new car sales.

[RichardJensen]

every successful business has to re-invent itself every 10 years or so to stay competitive

retail hasn't changed much since F.W. Woolworth & Piggly Wiggly pioneered self service. The only thing that's changed is the scale & the technology at the checkout counter.

[Deanh]

I am with you on this - there has got to be a better way -

 

It boggles my mind, that every successful business has to re-invent itself every 10 years or so to stay competitive but we still buy cars the same way we did 50 years ago! Ford itself has had a complete business make-over in the last few years, but their dealers (at least in my area) are the same as they have always been.

blame Monroneys.....if all cars were sold at suggested retail then your wish would have the grounds to become true....old OLD argument :boring:

[FordBuyer]

Huh... Used cars down 21.6%, new cars down 19.9% - I would have thought the total sales of used cars would have been even or up in response to the drop in new car sales.

 

I have heard figures as high as 25% of population no longer can afford an auto. That is why there is such a push for better mass transit in America plus more bicycle lanes. In Metro Detroit, I see more older guys than ever riding bikes with carriers for cargo. And in border towns the cops are confiscating cars if driver doesn't have driverr's license as illegals can't obtain drivers license. Most vehicles impounded are never claimed and municipalities are making millions selling them at police auction. God knows how many vehicle owners drive without auto insurance.

[move4ward]

Many people can't qualify for vehicle financing anymore. As much as 18% of consumers are unemployed or on part time unemployment but want to go full time. You have to look at U-6 rate look at all the marginally unemployed workers. The government reports the U-3 as the official unemployment rate, which does not give the full picture. The government does not count part time workers, discouraged workers(people who quit looking for a job, but still want a job) as part of the U-3 rate. One has to look at the U-6 rate to get true % of people suffering from unemployment and underemployment(part-time, but is looking for a full-time job).

 

Look at the non-seasonally adjusted January 2010 U-6 rate. That's alot of customers that are no longer able to buy new or used vehicles. They will keep driving their existing vehicles, whether they want another car or not.

 

http://www.bls.gov/news.release/empsit.t15.htm

 

NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data.

Edited February 16, 2010 by move4ward

[Marginal Economist]

So your belief is that repair work and and used car sales decrease in a recession? Otherwise, why would the drop-off in new car sales have caused any dealerships to go out of business?

Repair work, used car sales, new car sales, and part sales dropped in 2009 from 2008. 2008 sucked as well. Many dealers lost money in 2009 - it does not mean that they all went out of business.

[atomaro]

No one is surviving on repairs right now. Remember that cash for clunkers thing? There were a tremendous amount of vehicles taken off the road the were at the ripe age for brakes, tires, suspension work, exhaust, etc. Now they have been replaced with vehicles that are now only looking a an oil change and tire rotation...maybe an air filter replacement. Hardly what you would consider gravy work.