Unable to steer friends towards Big 3.

[otter]

Looks like someone woke up on the nativist-jingoist side of the bed this morning!

O.

[MikeM]

http://gregmankiw.blogspot.com/2009/...ignorance.html

[Mikeg]

If Greg Mankiw relied on the 2009 JD Powers dependability study instead of Consumer Reports, he would have to draw a completely different conclusion about why Chrysler and GM are in such dire straits.

Personally, neither CR or JDP are very transparent about their methodologies and with such different manufacturer rankings, I would take the results from their studies with a "grain of salt".

Most of what GM and Chrysler are faced with is the result of so much excess auto manufacturing capacity in the US, which was bad at a 16 million sales volume and is even worse at the current 10 million annualized sales rate. Over the long haul in a saturated market with excess production capacity, only the lower-cost manufacturers will survive.

[EMG]

http://www.consumerreports.org/cro/c...bailout-ov.htm

[mjs]

JD Power seems to be in sync with Consumer Reports in saying some Big Three vehicles perform extremely well and some not so well so the overall average for the nameplate suffers. Look at them individually and you'll see 5 of the 12 Five Star vehicles are American name plates.

Five Star Quality on 3 Corvette Models, the Malibu Sedan, the Silverado Pickup, the Fusion Sedan, and the Dakota Pickup.

Other Five Stars include the Toyota Camry, the Toyota Tundra, the Volkswagen Passat and Sedan, the Infiniti M, the Lexus LS, the Mitsubishi Galante, and Five Mercedes Models.

Suprise is no Five Star ratings for Honda, Nissan, Mazda, Suzuki, Hyundai, BMW, Audi, Acura, Volvo, Saab, and Scion.

I'm not sure about everyone else, but I buy one vehicle model, not every vehicle under the name plate. I'm one of the first to bash the pasts of The Big Three, but they're quickly coming around and they're learning they have to get rid of their bad models. Hell, GM is even coming out with the Volt so they can make a come back from the embarassment they allowed Toyota to hand down with the Prius.

[EMG]

No matter how bad the auto industry needed/needs to sell cars, the asshole dealerships treat perspective customers like SHIT. I have purchased 6 brand new american cars off the dealer lot in my life time, and each of those experiences was awful - aside from Saturn. [[good thing they killed off that brand....?) Unfortunately, the Saturn car I got was a lemon - but Im saying the dealership experience for BUYING was better at Saturn. Now, when I had problems with that Saturn, the dealership turned out to be as shitty as all the rest - and they fought like hell to avoid having to stand behind their product. [[they won)

Shut them ALL down. The automotives need a real distribution method that doesnt involve something called a"dealer". That is a VERY appropriate name for a criminal middle man - just like on the streets.

Seriously, in popular culture the only thing lower than a car salesman are lawyers, politicians and bankers.

Amen to that - at least as far as the Big 3 are concerned, when they're taking advantage of captive Detroit customers who they know HAVE to buy their products, no matter how bad they are, because they work for the company.

I'm REALLY glad I drive a Honda now - THAT dealer has always treated me well.

Here's a [[I think it's safe to say by now FORMER) Jeep owner who REALLY had some bad experiences. No, he's not me, but he sure brought back memories to which I can relate - the surprise extra things found broken down [[along with the $$$$$ surprise bills), or taking time off work to go pick up a car they had called to tell me was ready only to find out when I got there that they had made a mistake and not only wasn't it ready, they hadn't even gotten around to looking at it, and I'd have to try to get ANOTHER day off to pick it up when it finally WAS read. Well at least mine didn't get stolen right off the lot like his did. Guess too many people already knew it wasn't worth stealing.

http://can-you-not.blogspot.com/2007...o-to-hell.html

Hmmm....wonder if that dealer was on the list that's getting the ax.....

[Sstashmoo]

Quote: "I'm REALLY glad I drive a Honda now"

Quote: "Hmmm....wonder if that dealer was on the list that's getting the ax....."

Why would anyone that buy's a Honda care? Unless that person is getting some sort of kick out of watching the US automotive industry disintegrate, why would they care? They've already voiced their concern with their purchase...

[darwinism]

An update on one of my friend's car shopping adventure.

He has just moved to Michigan from Kentucky, and will be expecting another child in August. He has no ties to GM, Chrysler or Ford. Currently owns 2 older models Dodge and VW from the early 90s.

Because of my persuasion, he has agreed to add the Ford Fusion and the Chevy Malibu to his list, which includes the Hyundai Sonata and the Honda Accord.

After visiting a few Ford and GM dealerships within the tri-county area, we ventured further out to find out what Brighton Ford, Dick Genthe Chevrolet, Monroe Friendly Ford and Southgate Ford were able to offer. These 4 were specially recommended by fellow DetroitYes member, heedus.

None of the 4 above were able to offer any better deals for him, compared to dealerships in the Oakland, Macomb and Wayne counties. The sticking point appears to be their inability to act beyond the confines of the rebates and incentives system placed unto them. For example; my buddy is losing out on about $3000 of discounts from GM because he doesn't 'qualify'. He is losing out on at least $4000 of discounts from Ford because he doesn't 'qualify'.

I was with him throughout each and every one of these trips to the dealerships. For heaven's sake, why turn a customer away just because of stupid conditions like that?! Seriously. At this juncture, as much as I wish he would purchase a Ford or GM, I would completely understand if he were to choose a Honda or a Hyundai.

[heedus]

An update on one of my friend's car shopping adventure.

He has just moved to Michigan from Kentucky, and will be expecting another child in August. He has no ties to GM, Chrysler or Ford. Currently owns 2 older models Dodge and VW from the early 90s.

Because of my persuasion, he has agreed to add the Ford Fusion and the Chevy Malibu to his list, which includes the Hyundai Sonata and the Honda Accord.

After visiting a few Ford and GM dealerships within the tri-county area, we ventured further out to find out what Brighton Ford, Dick Genthe Chevrolet, Monroe Friendly Ford and Southgate Ford were able to offer. These 4 were specially recommended by fellow DetroitYes member, heedus.

None of the 4 above were able to offer any better deals for him, compared to dealerships in the Oakland, Macomb and Wayne counties. The sticking point appears to be their inability to act beyond the confines of the rebates and incentives system placed unto them. For example; my buddy is losing out on about $3000 of discounts from GM because he doesn't 'qualify'. He is losing out on at least $4000 of discounts from Ford because he doesn't 'qualify'.

I was with him throughout each and every one of these trips to the dealerships. For heaven's sake, why turn a customer away just because of stupid conditions like that?! Seriously. At this juncture, as much as I wish he would purchase a Ford or GM, I would completely understand if he were to choose a Honda or a Hyundai.

I'm sorry to hear that your experience w/these four dealerships weren't all that great [[if you need names of good salespeople at each of those dealers for any reason, let me know). I am curious, however, to hear about how your negotiations with the dealers went.

Since I have family that works in the auto industry, I only have purchased cars using their employee discounts. I had assumed that the way that most people purchased their cars were that they got quotes online from dealers. They then went to the dealers who gave them the best price and negotiated with those dealers. In negotiating, they used websites like Edmunds.com for invoice and true market pricing to get the best deal possible.

What has been your approach? Has it been the same for all of the brands that you're shopping?

[4real]

I was looking at a Dodge Ram.
I'm sure as hell not going to buy one now with the government and union owning 89%
of Chrysler and will tell anyone I know looking not to buy one.
They screwed the dealers and the 1st lien holders on the debt.
Ford F150 or the Toy Tundra is my option now.

[darwinism]

I'm sorry to hear that your experience w/these four dealerships weren't all that great [[if you need names of good salespeople at each of those dealers for any reason, let me know). I am curious, however, to hear about how your negotiations with the dealers went.

Since I have family that works in the auto industry, I only have purchased cars using their employee discounts. I had assumed that the way that most people purchased their cars were that they got quotes online from dealers. They then went to the dealers who gave them the best price and negotiated with those dealers. In negotiating, they used websites like Edmunds.com for invoice and true market pricing to get the best deal possible.

What has been your approach? Has it been the same for all of the brands that you're shopping?

Don't apologize, heedus, it is not your fault whatsoever. If it were up to you and me, all these A/Z plans and lease loyalty and mumbo-jumbo would probably be scrapped so that the domestic automakers can compete head-to-head without relying on fine prints.

Yes, the approach was as extensive as what you highlighted above. We have Edmunds print-outs and TrueCar.com stats in hand. We went through the identical process for all the brands on his shopping list.

All things considered, $3000 and $4000 of discounts is nothing to sneeze at.

[Eric_c]

Why do you feel you should get the additional incentives if you don't, in fact, qualify for them?

What if they offered specific discounts for police officers or military personnel? What about senior citizens?

Would you be upset if you didn't get those discounts?

Just askin'...

[mjs]

I don't like when someone with a $4000 discount asks why someone in California won't buy an American car like he did and I really don't like when an auto exec thats never been in a dealership thinks so what if the vehicles sometimes need work, its under warranty.

That attitude towards the myriad of issues with my Mustang Cobra is why I haven't been to a new car dealership in ten years. The damned thing came 50 horsepower short. If it weren't for the aggravation you get buying foriegn, I'd go get a Toyota or Honda this week.

[MoparDan]

I will continue buying Dodges provided they stay in business. We've bought four vehicles from the same dealership over the past 20yrs & have gotten very good usage from each with little problem on any of them. I tend to avg 18k miles/yr & will be the first to admit I'm a very aggressive driver who is hard on a vehicle. It was a tough pill to swallow when my wife decided to get a Honda Pilot but she liked the design & wanted an SUV of her own since I drive the Durango[[which she originally picked out mind you!). She has driven her parents' 300C often & is trying to convince me to pick one up when I'm due for a new vehicle; I'd love a Challenger R/T to cure my future mid-life crisis. They previously owned a Concorde & were impressed with its reliability, so it was no problem referring them to check back with their Chrysler dealer. The Pilot isn't a bad ride, but it lacks good torque which is apparent when loaded up with six people & luggage. Her previous vehicle was a '99 Grand Caravan which ran flawlessly until she clipped a curb last yr & tore up the front end.
That's my take on things & apologies to those of you who were hoping to read a novel of horror stories of how my Dodge dealer jerked me around & that my vehicles spent more time in the garage than the road.

[darwinism]

Why do you feel you should get the additional incentives if you don't, in fact, qualify for them?

What if they offered specific discounts for police officers or military personnel? What about senior citizens?

Would you be upset if you didn't get those discounts?

Just askin'...

My friend was in the military, in fact he was in the first Gulf War. So, there is no doubting his commitment to his country.

But when it comes to buying a car, he needs to do what's best for his family first and foremost.

I am not upset, and neither is he, actually. We're just shaking our heads figuring out what has the domestic automakers do above and beyond, in order to defeat the transplants. Frankly, from the consumer's viewpoint, they haven't done much.

Discounts coming from GM, a company that received taxpayers money, ought to be extended out to every car buying customer walking into their showroom with money to spend. Why limit yourself from making a sale, just because someone with cash isn't a police officer, a senior citizen, a teacher, a GM employee with A/Z plan, a City of Detroit employee or any specific demographic?

Every business owner, small and mid-size, that I know, believe in closing the deal. Period. If you can sell the car for $16,000 - Sell it! There is no intelligent reason to lose the deal at $20,000. There is one golden rule in sales - Always Be Closing.

In an economy suffering from deep recession, and in a region plagued with depression-level unemployment rate, there should only be one qualification and eligibility - Greenbacks!

Because guess what? If GM dealers let that $16,000 sales lead walk away ..... VW, Honda, Toyota, Nissan, Kia, Subaru, Hyundai and scores of others are happy to close the deal.

[Sstashmoo]

MJS, You say this:

"That attitude towards the myriad of issues with my Mustang Cobra is why I haven't been to a new car dealership in ten years. The damned thing came 50 horsepower short."

Then you say this:

""Naive? I'm a licensed attorney that took classes in consumer protection. A manufacturer can not lie about specific numbers without facing consequences; its a contract violation. Under certain circumstances, its criminal fraud. Read the Michigan Consumer Protection Act. Read the Magnuson-Moss Act. See what the FTC does. If you are aware of false advertising, please contact them.""

So, did you file a complaint with the FTC? Or do you just throw that up when you're losing an argument? Well, did you get the extra 50 HP they shorted you on? [[Really curious how he determined he was 50 short)

[jiminnm]

They previously owned a Concorde & were impressed with its reliability, so it was no problem referring them to check back with their Chrysler dealer.

Dan, I had to laugh when I read this. I had a 1994 Concorde, which I drove for 5 years and 120,000 miles. Despite regular service and maintenance, I had to replace the transmission, transmission cooling lines [[separate event leaving me stranded in nowhere Oklahoma), power steering, air conditioner, brake cylinder, radiator [[I'm sure there was more, but I've blocked it from memory). I don't foresee a Chrysler product in my garage for awhile, despite my attraction to the new Challenger.

[MoparDan]

Dan, I had to laugh when I read this. I had a 1994 Concorde, which I drove for 5 years and 120,000 miles. Despite regular service and maintenance, I had to replace the transmission, transmission cooling lines [[separate event leaving me stranded in nowhere Oklahoma), power steering, air conditioner, brake cylinder, radiator [[I'm sure there was more, but I've blocked it from memory). I don't foresee a Chrysler product in my garage for awhile, despite my attraction to the new Challenger.

Sorry you had such a lemon[[& then some!). I believe theirs was a '98. They drove almost exclusively GM since the early 60s. I owned a '96 Intrepid ES at the time...my father-in-law took it for a spin & being a tall guy, he enjoyed the leg room. He was driving a Bonneville & in the market for a new car so he picked up the Concorde. He loves the 300C, but at 84yrs old, his time behind the wheel isn't what it used to be. It's probably more car than his wife can handle but she copes with it.

[Eric_c]

My friend was in the military, in fact he was in the first Gulf War. So, there is no doubting his commitment to his country.

But when it comes to buying a car, he needs to do what's best for his family first and foremost.

I am not upset, and neither is he, actually. We're just shaking our heads figuring out what has the domestic automakers do above and beyond, in order to defeat the transplants. Frankly, from the consumer's viewpoint, they haven't done much.

Discounts coming from GM, a company that received taxpayers money, ought to be extended out to every car buying customer walking into their showroom with money to spend. Why limit yourself from making a sale, just because someone with cash isn't a police officer, a senior citizen, a teacher, a GM employee with A/Z plan, a City of Detroit employee or any specific demographic?

Every business owner, small and mid-size, that I know, believe in closing the deal. Period. If you can sell the car for $16,000 - Sell it! There is no intelligent reason to lose the deal at $20,000. There is one golden rule in sales - Always Be Closing.

In an economy suffering from deep recession, and in a region plagued with depression-level unemployment rate, there should only be one qualification and eligibility - Greenbacks!

Because guess what? If GM dealers let that $16,000 sales lead walk away ..... VW, Honda, Toyota, Nissan, Kia, Subaru, Hyundai and scores of others are happy to close the deal.

How do you know the car in question could be sold for $16,000? What if they paid $16,500 for the vehicle? Are you implying the dealership should take a loss on your deal, or do you have a friend who works there telling you exactly how much they paid for the car?

I'm just trying to follow your point.

[darwinism]

How do you know the car in question could be sold for $16,000? What if they paid $16,500 for the vehicle? Are you implying the dealership should take a loss on your deal, or do you have a friend who works there telling you exactly how much they paid for the car?

I'm just trying to follow your point.

The following example is just hypothetical numbers;

If they paid $16,500 for the car, then why are they offering A/Z plan buyers a price of $16,000 ..... but yet offering Regular Joe a price of $20,000?

Are you saying that they are taking a loss on the A/Z plan buyers and then make that up by profiting huge margins off of Regular Joes?

If that is the case, why not offer everybody a price of $17,000 and close ALL the deals successfully? Make smaller margins on each, and close on higher volume of sales.

[mjs]

MJS, You say this:

"That attitude towards the myriad of issues with my Mustang Cobra is why I haven't been to a new car dealership in ten years. The damned thing came 50 horsepower short."

Then you say this:

""Naive? I'm a licensed attorney that took classes in consumer protection. A manufacturer can not lie about specific numbers without facing consequences; its a contract violation. Under certain circumstances, its criminal fraud. Read the Michigan Consumer Protection Act. Read the Magnuson-Moss Act. See what the FTC does. If you are aware of false advertising, please contact them.""

So, did you file a complaint with the FTC? Or do you just throw that up when you're losing an argument? Well, did you get the extra 50 HP they shorted you on? [[Really curious how he determined he was 50 short)

I did not file a complaint because they fixed it with the recall. They also fixed the other issues it had all the other times I took it in. The FTC can't and shouldn't be allowed to do anything when the false claim is unintentional. You can't sue under contract law, Mag-Moss, or MCPA if they fix it and the rate of problems isn't high enough though I did once threaten to. In the letter Ford sent me, they only said I may have low horsepower problems. I learned the whole truth from the automotive media. Ford's attitude in handling it and other issues I had is why I said "I really don't like when an auto exec thats never been in a dealership thinks so what if the vehicles sometimes need work, its under warranty." Here's an article on the recall and how it was discovered. It was only 30 hp short; sorry I'm not good at memorizing exact numbers.

http://auto.howstuffworks.com/1999-2...d-mustang4.htm

[heedus]

Don't have much time to write, but I thought I'd add a little to this discussion.

First, when a dealer sells a car/truck with an employee discount, it receives a dollar amt that is separate from the invoice. With A/Z plan, it's something like $800 for a $30K car. It does NOT lose money on the transaction.

Second, I imagine the employee discount has remained b/c of union and otherwise general employee influence. If you look at most retail outlets, the retailer provides a discount for its employees. It doesn't bother me knowing that the Best Buy employee selling me my big screen TV would have paid 10 or 20% less than me [[note: I have no idea if Best Buy offers employee discounts. I'm only using it as an example). I know that most retailers aren't approaching bankruptcy, but most retailers also don't have to negotiate with a very powerful union. I wonder if Circuit City considered taking away the employee discount once when it started approaching the death spiral.

[darwinism]

Don't have much time to write, but I thought I'd add a little to this discussion.

First, when a dealer sells a car/truck with an employee discount, it receives a dollar amt that is separate from the invoice. With A/Z plan, it's something like $800 for a $30K car. It does NOT lose money on the transaction.

Second, I imagine the employee discount has remained b/c of union and otherwise general employee influence. If you look at most retail outlets, the retailer provides a discount for its employees. It doesn't bother me knowing that the Best Buy employee selling me my big screen TV would have paid 10 or 20% less than me [[note: I have no idea if Best Buy offers employee discounts. I'm only using it as an example). I know that most retailers aren't approaching bankruptcy, but most retailers also don't have to negotiate with a very powerful union. I wonder if Circuit City considered taking away the employee discount once when it started approaching the death spiral.

Thanks for the input, heedus.

We didn't think the dealership would be losing money on any transactions. If they are able to offer A/Z plan pricing per se, they are making some money off of Mr. A/Z Customer. If GM is so dire and accepted such bailout money from taxpayers, it isn't really that much to ask for in order for the dealers to go above and beyond to bend over backwards and around, in order to close a sale.

Like I said earlier, it is what it is. My friend is not mad, I am not mad. We're just baffled at the lackluster effort or the lack thereof, on the dealership's part to get business done aggressively. Next time, if any of us see somebody driving a non-domestic vehicle, perhaps we will be a lot more understanding.

It doesn't bother most people, me included, that traditionally in a perfect world Best Buy employees enjoy a 10% discount on their purchases. But it may be a whole different story if Best Buy took billions in taxpayer bailout, and if Best Buy is 4 days from bankruptcy, and if Best Buy is chanting "Out of a Job Yet, Keep Buying Non-Best-Buy". In that case, Best Buy would be facing the same scrutiny as GM.

[Eric_c]

Each sale has to stand on its' own. Profit from one deal doesn't [[shouldn't ever) cover another deals' loss. The manufacturer sells the car to the dealer at a set price. If the dealer sells the car for less than that amount, he just flushed the difference down the toilet.

When an Employee Discount [[from any manufacturer; even an "import") is used, the dealer agrees to sell the car at a below-cost price to the eligible consumer with the understanding that the amount will be reimbursed by the manufacturer. A dealer can't sell his inventory for less than he paid without going out of business pretty quick!

The dealership has no more control over what's happening at the factory than the guy on the line. Incentives are what they are and they're different every month. No one in their right mind would squabble over two or three-hundred dollars on a $20,000 product, but to be THOUSANDS of dollars apart suggests a few things.

Among the possibilities:

1.) The person didn't really want the car, anyway.

2.) Expectations were not based in reality.

3.) The product was outside the desired budget from the very beginning.

4.) The prospective buyer did not see the value in the product [[that can be blamed on the salesman).

A lot of people want to believe they can walk into a dealership and be handed the keys to the car of their choice because the government granted them a loan. Guess what? The government grants loans, sometimes. Go tell the guy repaying a federally funded student loan to give you some of his money now that he's got a job that you "helped him to get" with your tax money! Ha!

If you really think about it, the manufacturers in trouble right now apparently weren't charging enough!

And by the way, I'm not in any way chiding anyone, but merely drawing attention to a couple of points in the discussion that needed clarification.

Happy motoring!

[darwinism]

Each sale has to stand on its' own. Profit from one deal doesn't [[shouldn't ever) cover another deals' loss. The manufacturer sells the car to the dealer at a set price. If the dealer sells the car for less than that amount, he just flushed the difference down the toilet.

When an Employee Discount [[from any manufacturer; even an "import") is used, the dealer agrees to sell the car at a below-cost price to the eligible consumer with the understanding that the amount will be reimbursed by the manufacturer. A dealer can't sell his inventory for less than he paid without going out of business pretty quick!

The dealership has no more control over what's happening at the factory than the guy on the line. Incentives are what they are and they're different every month. No one in their right mind would squabble over two or three-hundred dollars on a $20,000 product, but to be THOUSANDS of dollars apart suggests a few things.

Among the possibilities:

1.) The person didn't really want the car, anyway.

2.) Expectations were not based in reality.

3.) The product was outside the desired budget from the very beginning.

4.) The prospective buyer did not see the value in the product [[that can be blamed on the salesman).

A lot of people want to believe they can walk into a dealership and be handed the keys to the car of their choice because the government granted them a loan. Guess what? The government grants loans, sometimes. Go tell the guy repaying a federally funded student loan to give you some of his money now that he's got a job that you "helped him to get" with your tax money! Ha!

If you really think about it, the manufacturers in trouble right now apparently weren't charging enough!

And by the way, I'm not in any way chiding anyone, but merely drawing attention to a couple of points in the discussion that needed clarification.

Happy motoring!

Eric_c, your postings have been cordial and polite. And debates can certainly happen in civil ways.

I can see your point about dealerships simply being the middlemen of the transaction between the manufacturer and the consumer. The scenario is frankly a pretty simple straight-forward process in commerce. GM sells the car to Dealer at perhaps $16,500 as you illustrated, and Dealer sells the car to Regular Joe at $20,000 in order to make a profit of $3,500. If Dealer sells the car to Mr. A/Z Plan at $16,000 then obviously the Dealer is counting on GM reimbursing them the $4,000.

If that is the business model, as you stated, then obviously there is too much unnecessary complications because if you have been to other parts of the country, you will realize that other cities in the West Coast, Southwest, East Coast, and Northeast do not play this A/Z plan game. In other words, GM and its dealers are only doing this in our neck of the woods!

Back in the good 'ol days when our region was primarily employed by the Detroit Big 3, perhaps such a scheme makes good sense. However, within the past 5-6 years, the Detroit Big 3 have shed so many jobs, statistically-speaking, there really aren't that many A/Z plan folks who are buying cars anymore.

Eric_c, you are absolutely right, in that squabbling over a few hundred dollars isn't worth losing the sale. $3,000-$4,000 is substantial enough that it is worth digging deeper into the myriad of backroom underbelly games that are going on.

Based on our scenario again, wouldn't it make more business sense to do away with the A/Z plan and to simplify the entire process, so that the offering price can be $17,000 or even $18,000 for everybody. The Dealer doesn't need to count on GM reimbursing them for selling below-cost, and the Dealer can assure itself of profiting $500 at the very least. The buyers do not have to shop around endlessly, because they know exactly how much the amount of profit is - most customers aren't opposed to dealers making money - the issue lies in the 'secretive' operation more than anything else. As I said earlier, for what it's worth, we're 4 days from the bankruptcy of GM. Just as the culture around here always is ..... a day late and a dollar short, a little too late to do the right thing now.