Topic: Does brand influence dealer quality?

[Sival]

I missed a few replies here...

Articsteve, Saturn cars' prices were generally lower than their competition because while the rest of the competition built in negotiation margins in the prices, Saturn didn't. So the MSRP was lower than similar cars. So if Saturn screwed people by overpricing, then everybody else is even worse in that regard.

You're the first I heard who said anything about trade-ins being valued less in Saturn dealers than in other dealers.

As for the idea that businesses will fail if the salesmen aren't paid by commission, sorry, I don't follow you that way at all. Salesmen who work by commission often become very aggressive and pushy, thinking this helps their sales, but some people are turned off by that. Whether or not it actually is successful or not is a complex question. An example of a successful no-commission environment is Best Buy which has become the biggest electronics retailer in the North-Eastern US while having no commission for their employees in sales, something that set them apart from their competitors.

Saturn's own ultimate failure is due to opposition to Saturn from GM's own bureaucracy and the UAW. Saturn started very well, in its first years, despite not selling any car to fleets (to my knowledge), the S-series sometimes sold more than the Civic and the Corolla. However, no investment on products was forthcoming from GM until nearly 10 years after its introduction, at which time it had become a way for GM to introduce new, uncertain technologies as tests in the real world: the 3.0L V6 in the L-Series, the infamous VTi transmission in the Vue and ION, the Aisin-sourced 5-speed in the ION, the mild hybrid drivetrain in the Vue and Aura, testing the direct importation of european cars with the Astra, and releasing cars to work out the kinks before releasing very similar products in other divisions (ex: the ION before the Cobalt, both sharing engine, platform and transmissions, the Aura before the Malibu, again same platform, engines and transmissions).

Saturn had become a real world laboratory for GM, which weakened the surprisingly strong fanbase it had considering the kind of cars it made (compacts). When GM ran into difficulties and decided to rationalize its brands, Saturn got chopped, its brand had become confused and dull.

[bzborow1]

The question was, "Does brand influence dealer quality?" 

I have to say absolutely it does.  It's funny how if you like a car, and are willing to pay whatever to own it, how nice the dealership appears to be.  My experience has been that if someone is married to a brand, they ignore all the details.  I bought a Toyota largely due to my father-in-law's influence and have had a pretty bad experience all around.  The father-in-law, however, refuses to acknowledge even the slightest negative against the dealer despite them attempting to stiff me on a couple of occasions.

Everything is within reason, of course, as everyone has a breaking point.  If you like your car, my view is that you are less likely to notice "problems" with a dealership.  So in that sense, brand power does influence dealership perception to some degree.

[Schmengie]

You can get a crappy dealer regardless of the quality of the product. A good (bad?) example, at least for me, was the Mazda dealer in Kelowna. The salesman was rude, obnoxious and just plain dishonest. He refused to disclose the final price of a Mazda5 we had our eyes on and tried to steer us into a lease even though we insisted on paying cash. We wasted an entire afternoon there and left angry, disappointed and without the car we wanted.

The Nissan dealer in Vernon was just the opposite. The salesman gave us an up-front price and a discount for paying cash, didn't try to pull the nitrogen\undercoating\etching-fee BS on us, and even threw in free life-time oil changes. Service has been good so far, friendly, reasonably quick and thorough. I haven't had a single warranty issue with the Versa, so I can't really comment on that aspect of it.

[Ex-airbalancer]

My experience is different. When I traded in the LR for a Saab and number of years back. The dealer gave me $1500 more on trade in then any other dealer.

Any dealer or a Saab dealer?  You got $1500 more because that $1500 was built into the price of the Saab.

Same thing with the Aura.  Unless you know the actual cost of the vehicle to the dealer and you need to be part of the dealer to know that, it's all smoke and mirrors with trades.

Oh I no I got a good deal. The 9-5 I was interested in had been sitting on the lot since January, it was June and they where motivated to move it. From mid 2007 through 2009 I was consulting at GM CHQ. You don't think I went back and looked at historic dealer cost data?

Where are you working  now?

[ArticSteve]

Articsteve, Saturn cars' prices were generally lower than their competition because while the rest of the competition built in negotiation margins in the prices, Saturn didn't. So the MSRP was lower than similar cars. So if Saturn screwed people by overpricing, then everybody else is even worse in that regard.

Saturns were priced lower because they were pure crap and even with lower pricing/standard pricing they couldn't sell them.  The brand lost money continuously and only an ex Saturn dealer could set the record straight on just how much GM actually subsidized his inventory.

If the margin doesn't come out of the new unit it comes of the trade. 

You have 2 ppl buying the exact same unit.  One pays $1000. less than the other.  The person paying the $1000. got the "better" deal because his trade had a $1000. more margin in it than they received.  The real money in new car dealerships is in the trades.  When you see those signs saying "all trades welcome", they actually mean it.

[ArticSteve]

As for the idea that businesses will fail if the salesmen aren't paid by commission, sorry, I don't follow you that way at all. Salesmen who work by commission often become very aggressive and pushy, thinking this helps their sales, but some people are turned off by that.

In the car business if you don't pay ppl primarily on a numbers sold basis, you'll go bankrupt.

It's a very difficult retail business and you absolutely need to close ppl before they go next door and get closed by the guy there.  Good sales persons work all the time.  Fielding calls 24/7 from Trader and Kijij leads via their Blackberrys.  Attending the store after hours and on Sundays to meet customers.  Whatever it takes.

If you employ sales ppl to sit around a dealership showroom, drink coffee and shoot the sh*t with street traffic and then wait for them to ask to buy a vehicle, you're FINISHED.   

[Sival]

You're all wrong, Articsteve. The Saturn shopping experience was one of the things that made Saturn extremely popular considering their initial one-car lineup. Saturn dealers sold more units per dealers than any other at the beginning, despite having only one model. The no-pressure attitude isn't a death sentence. Saturn didn't make profits most years (they did a few years) because they had a lot of capital costs and they had only one model on which to spread development costs. An entire brand can't be profitable selling only a single low-priced compact car.

Saturns sold a lot in the beginning, in 1994, they had 16% of the compact market, only the Ford Escort sold better. But updates didn't come and the initial momentum wasn't maintained. Even in the early 2000s, Saturn cars had lower MSRPs than very similar vehicles from other brands, like ION versus Cobalt.

The Saturn dealer structure was one of the best assets it had, it maintained it with good sales even as no new products were forthcoming. There is a lot of factors to blame about Saturn to explain its fall, its "no commission" dealers are not one of them.

[gta_driver]

My experience is different. When I traded in the LR for a Saab and number of years back. The dealer gave me $1500 more on trade in then any other dealer.

Any dealer or a Saab dealer?  You got $1500 more because that $1500 was built into the price of the Saab.

Same thing with the Aura.  Unless you know the actual cost of the vehicle to the dealer and you need to be part of the dealer to know that, it's all smoke and mirrors with trades.

Oh I no I got a good deal. The 9-5 I was interested in had been sitting on the lot since January, it was June and they where motivated to move it. From mid 2007 through 2009 I was consulting at GM CHQ. You don't think I went back and looked at historic dealer cost data?

Where are you working  now?

I'm over at the 3 pointed star.

[Ex-airbalancer]

My experience is different. When I traded in the LR for a Saab and number of years back. The dealer gave me $1500 more on trade in then any other dealer.

Any dealer or a Saab dealer?  You got $1500 more because that $1500 was built into the price of the Saab.

Same thing with the Aura.  Unless you know the actual cost of the vehicle to the dealer and you need to be part of the dealer to know that, it's all smoke and mirrors with trades.

Oh I no I got a good deal. The 9-5 I was interested in had been sitting on the lot since January, it was June and they where motivated to move it. From mid 2007 through 2009 I was consulting at GM CHQ. You don't think I went back and looked at historic dealer cost data?

Where are you working  now?

I'm over at the 3 pointed star.

 

[Mike]

As for the idea that businesses will fail if the salesmen aren't paid by commission, sorry, I don't follow you that way at all. Salesmen who work by commission often become very aggressive and pushy, thinking this helps their sales, but some people are turned off by that.

In the car business if you don't pay ppl primarily on a numbers sold basis, you'll go bankrupt.

It's a very difficult retail business and you absolutely need to close ppl before they go next door and get closed by the guy there.  Good sales persons work all the time.  Fielding calls 24/7 from Trader and Kijij leads via their Blackberrys.  Attending the store after hours and on Sundays to meet customers.  Whatever it takes.

If you employ sales ppl to sit around a dealership showroom, drink coffee and shoot the sh*t with street traffic and then wait for them to ask to buy a vehicle, you're FINISHED.   

Couldn't have said it better myself.  I have witnessed both type of sales people at dealerships I worked with over the years and guess which ones last year after year?  Working as rep back in the day responsible for ensuring a dealers used car inventory went online (and new car back then) I would see first hand how quickly a dealer's inventory was turning over on a week to week, month to month basis. You got a pretty quick sense of who were the successful dealers and who were not. A lot of us here do not like 'pushy sales people' at car dealerships.  But that is because we are enthusiasts.  We know exactly what we want, what options we want and what the price range should be.  3/4 of the people I talk to who are interested in a car purchase regard the buying process the same as buying a large appliance.  Visit a few stores, see which appears to be the best and go with the best deal......enter the salesperson.  A lot of people need to be convinced and/or reassured why they should buy this car over that car even if they tell you differently.