Smart might not make it in America

[rfernatt]

Originally Posted by forestacademy

If they don't take trades you take a hit in taxes. Trade in vlue is taken off the sale price for the sales taxes here

Same for trade-ins in WV (provided it isn't a leased vehicle). But, I think Panda is saying they don't keep the used cars and sell them on a separate lot for profit. I've dealt with dealers who do something similar and just dump the car to a wholesaler and keep no used car inventory. I'm sure they make a couple bucks, but not like selling the used vehicles themselves. I've read that used vehicle sales can be more profitable than new vehicles since it isn't easy to cross shop and dealer cost info is not available as on new vehicles.

[NANO]

I know smart center bloomfeild buys cars at auctions and sells them since i have seen mustangs and chargers in their lot, i had asked who traded in a mustang gt for a smart and he said "oh we buy those at auction and resell them. so not all cars sitting in the lot are trade in's

so yes some dealers with soft sales are selling used cars as to turn around low sale numbers. that way everbody wins.

[BobDiaz]

There are ways to cut costs in bad times...

Merge the Smart Dealer with the Dealer for other cars for both sales and service.
Close out the least performing Dealers.
Run with a minimum of staff.
...


It will take several years for a recovery (assuming a full recovery is possible), but we are likely at the low point, so things only get better down the road. From a business standpoint, if things appear to be getting better, it's worth holding out for better days...


Bob Diaz

[forestacademy]

Unfortunatly we have heard from a few folks about what happens when the smart service gets rolled into another dealer. The result, Poor stepchild service.

I love my indemendent smart center and service. I sure would hate to see it get rolled into the chevy dealership next door. (same owner)

[dsoukup]

My local dealer in Santa Barbara took my first smart in trade for my current Brabus. They do sell used smarts, and hey seem to be doing well considering the times. I most definitely do not feel like a poor stepchild among the Porsches, MBs, Land Rovers, Jaguars, and BMWs which they also sell and service.

[ckgonska]

Originally Posted by Big Panda

Do the math: 75 dealers dividing up 13,000 units is only 14 cars/mo. Can't survive on that. Even 'if' the smart centers were grossing $1,000 per, that's only $14,000/mo in gross profit for the dealership, to cover payroll and expenses. Not nearly enough $$ to survive. Add to that the bad press that 'we' get and well, I don't like what I see.

I love my smart, just concerned that the smart centers may not be around for long.

Probably need to factor in the service department.

[SmartDigger]

Easton is part of a bigger multi-brand dealership. I would think they will be fine.

[artist]

I posted the first message in this thread and even though I had some serious first year problems with my Smart by the time of my 24,000 warranty my Smart was running good and I've had no problems over the last 10,000 miles. Since my dealer is so far away I've found a good foreign car service center in my area who is convinced that they can work on a 3 cylinder Mitsubshi, so that would mean no maintenance revenue to my dealer.
I'm not a pessimestic person, but I don't see how they can make it.

[Gearhead]

It's not the quantity of cars sold or the number of dealerships that matter so much as the quality of the underlying business plan... There are lots of instances of other car brands which have sold many more units per year in the US then vanished from the market -- and lots of instances of other car brands which have sold just a small number of cars each year -- but which have remained in the US market for well over a half century.

[Mike T]

Sure but the low volume ones that stuck it out have high margins on each sale.....one example of a marginal importer with a moderate margin was Peugeot, whose sales peaked at about 20,000 in the USA....but in the average "good" year they were around 10,000 sales. They were in the USA for 32 years, left over 18 years ago.

smart is not a high margin car, especially in the USA. You can bet that Penske's coming under increased cost pressure as his desire for 2010 models is about 1/3 what the desire for previous model years was.