Car Dealerships: an Outdated Model
Posted by Bill McGonigle Tue, 02 Jun 2009 05:40:00 GMT
If I were going to start a car dealership here in the wilds of New Hampshire it would be called "The 4-Wheel Warehouse". OK, so I'd actually spend some time thinking up a less terrible name, but I'd just sell four-wheel-drive and all-wheel-drive vehicles. I won't buy anything else living here, so why would I sell anything else?
Well, with the current model, that means I'd pretty much have to be a Subaru dealer because nobody else makes a full line of AWD vehicles. Subaru's are great, don't get me wrong, but not everybody wants a Subaru.
The only way this would make sense to me would be for me to carry an Impreza, an Outback, and a Forester. I don't imagine many WRX's sell up here, and nobody likes the Tribecca. But Mercedes also makes some good 4Matic vehicles, and Lexus makes an AWD sedan now, as well as their SUV. Honda still makes a Minivan, and Toyota has the Matrix. Honda also has the Element, which is also cheap and quirky. Maybe I don't care for the RAV-4 or the CRV or the 4-Runner. But I definitely want to carry the Tundra, but the Ridgeline I don't think has great market appeal.
What am I doing here? I'm thinking like any normal retail business owner, choosing to sell the products that make sense in my market. Creating a place of commerce where customers can find, review, and compare the products they're interested in. What do I have to do now if I'm interested in getting an all-wheel vehicle? Drive all over creation and spend days test driving, talking to salesmen who know even less about the competition than I do walking in, and perhaps their own products. There's no value-add there, and my dream car dealership would create great value in a largely undifferentiated market. Every salesguy would know alot about car traction and be able to help people pick the right car for them. I think I could even command a market premium for the service.
Pick just about any other store that's not "an X dealer" and that's how they work. I can walk to the tool aisle of Home Depot and compare a DeWalt to a Milwaukee to a Bosch, and yes, even a Rigid. It's true Home Depot doesn't handle tool repair, but every corner garage manages to repair all kinds of cars, so it doesn't seem plausible that a dedicated dealer would have any trouble at all, unless the manufacturers purposely impede.
But the current model makes selling cars the way my market would prefer impossible, or next to it. Maybe there are too many car dealers out there, but perhaps our countryside is just littered with inefficient, irrelevant car dealerships that are relics of a time gone by. Instead of bemoaning the loss in quantity, perhaps it's time to start addressing quality.
I'd like to have some outdated model of car ;)
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Millions of cars are sold every year and lots of people purchase their car without any options. Car dealers do offer a fair number of custom parts to help differentiate and personalize the vehicles they sell. Some offer different wheels, roof racks, body kits, brush guards, nerf bars and running boards. These parts will help set your car, truck or SUV apart from the rest of the vehicles on the road.
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It sounds like you are talking a market research before starting a business. any business, in fact. And whether one intends to sell cars, or ice cream cones, he needs to address the customer needs, or he won't succeed. Some businesses address general needs while others specialize in certain areas. The better they address the needs or demands, the more profit they get.
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A car dealership or vehicle local distribution is a business that sells new cars ... used to move the vehicle from the factory to the dealerships.
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