Car dealerships the new endangered species? - Top Stocks Blog - MSN Money
 
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Car dealerships the new endangered species?

Posted Oct 01 2008, 02:52 PM by Kim Peterson
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One in five U.S. car dealerships could bite the dust in the next year, according to a study out Wednesday. Sales are down. Credit is harder to come by, and even the people who have good credit are leery of making big car purchases.

Potential investors are staying away, and no wonder. Car sales in this country have declined for 11 months straight -- the longest slide in 17 years, according to Bloomberg.

And September was a particularly ugly month. Carmakers are reporting results for the month, with negatives across the board. Ford's U.S. sales fell 34% from the month before, and Toyota was down 32%. GM's drop was 16% and even Hyundai saw a 25% drop.

The biggest Chevy dealer in the world shut down its dealerships last week, and others are sure to follow. Once upon a time, these dealerships could have received loans to carry them through the bad times. But nowadays, a loan to a car dealership is about as scarce as, well, a customer walking through that dealership.

Related reading:

Ford shareholders want out

Emerging markets help Ford and GM get their $50 billion

High oil = bankruptcy for automakers and airlines?

The death of the minivan (and Chrysler?)

 

Comments

 

Want to see the car industry snap right back like a rubber band? The unions have now virtually killed themselves.  Now is the time for Ford and GM to build  solid, long lasting, fuel efficient little cars that sell for under ten grand, like the original VW.  It's timde to change the way we think.

Quint

It's always been my understanding that dealerships make money on the financing, Harvman.  You forgot to mention that!

Quint

Robert, your naive attitude about foreign carmakers providing American jobs is what has happened to the US market. Are you honestly so foolish as to think all the money made by those foreign carmakers is staying in the US? IT DOESN'T!!!!!!!! How about if we give your job to a foreigner?  BUY AMERICAN!!!!!!

We love you Ed. You have hit the nail on the head!!! What GM really needs is some true carguys sitting in the Renaissance Center.

We drive HONDA automobiles and DODGE trucks in my family and have had EXCELLENT history with both products! HONDA has been building autos on American soil and thus providing AMERICAN jobs for many years!

Both GM and FORDhave foreign manufacturing plants as well because of the global market but neither has so far been able to pull off what Honda and Toyota have and that's build a reliable, efficient, cost effective product that will provide HUNDREDS of thousands of trouble  energy efficient mileage for the consumer.

Our governmant has been in bed with the lobyists and Labor unions for far to long, allowing old business practices to go unchecked for the past 35 plus years and allowing business Managers to continue to operate and basically promote greed across the board, where else in the world have governments allowed managers to keep $ MILLIONS in "Bonuses" while the business failed, share holders lost their investments and employees lost their jobs?

Larry Bartlett has it correct, we are taking the same path to basic econonomic path as Britian, just ask their citizens  in the UK about their cost of living these days, my wife is British, we travel there to visit  less and less now because of the expense involved, no longer the same when I was a child, we enjoyed a vacation almost every year, no longer because of the government we have had for the past 25 years.

I think it's time that we as AMERICANS stand up for our rights and refuse to support an out of control situation, we need to get the message to ALL politicans of ALL parties that "Business as usual will no longer be accepted" and stop wasteful programs that provide subsistance for illegal immigrants, generation after generation of welfare babiies, affirmative action, etc.

My wife took the required steps to enter the country LEGALLY and has been a resident for 30 years while working and paying taxes and contributing to OUR society as a responsible person, she didn't arrive here with her hand out asking about free government benefit programs! So much for ALL of the crying bleeding hearts out there, congratulations you've also helped create the current economic situation, you should feel so proud!  Due to the mess my daughter doesn't even have math books in the school because of budget cutbacks but there seems to be no problem paying teachers to stay after school to act as paid "Babysitters".

Parents need to start taking RESPONSIBILITY for their actions and CHILDREN, FATHERS need to step up to the plate and help do something instead of just father a child or many children and simply walk away without a care!

YES, YOU KNOW WHO YOU ARE!

If these politicians can't set us on the path to recovery, then they'll be looking for new jobs in some other fields!

STAND UP FOR OUR RIGHTS AS AMERICANS!

It's about time that the fatcats in every industry get their just reward for the huge amounts of  dollars they have been taking out of our economy at the expense of what used to be the middle class. Now let them see what it's like to struggle to pay their bills. Unfortunatly they are already paid and may never really have to exprience what the rest of us have to continue to go through. Carl Marx said, "Capitalism will destroy itself". I love America, but it's ashame he was right.

Greed has finally caught up to us thanks to corporate America!

Being in the automotive business for approximately 10 years...it truely amazes me that we could find our country in such a mess!  The CEO's of many compaies with annual salaries, yearly bonuses...are sickening....millions of dollars a year.  Then you have the other flip side of the coin...people who take out home equity loans to purchase a new vehicle?  Go Figure!  Or taking out second and third mortages to take their families to the World Series or Super Bowl!!!  The list can go on and on....People also can continue to pay 4K - 5K over the sticker price of a Honda Fit...now that makes alot of sense....Yes, some forgein vehicles are made here...Toyota...Honda....Hyundai.....but the money is still going to the forgein market....We must have forgotten about the Pearl Harbor, Korean Conflict..etc....It amazes me to see veterans with veteran plates driving forgein vehicles.....We need to wake up in America!

Well I work for a Ford dealership and times are very tuff right now. I think in part because of the economy but mostly due to fact that the excecs at ford motor company have had their heads up their buts for many years now. The foriegn car companies have seen the future and knew the oil prices wouldn't remain cheap forever, so they designed and built much smaller high milage cars to get ready for the jump in oil. Would I ever buy or drive a foriegn car, absolutely not. My friends and relatives who own foriegn cars are not allowed to park in my driveway, I still remember who our enemies were in WWII and the Koreans don't like americans much at all. The Jap and Korean cars may be put together here in the states but the majority of the parts are still shipped in from many other countries. The american car companies create a demand for several other american manufacturers that make seats, wheels, sheet metal, engines, transmissions, etc. and if Ford and General Motors go down it will a huge domino effect like no other.

One more thing, you want to talk about qaulity comparison to jap and german cars.  I own a newer expedition, taurus, and f150. I also own a 1989 Mercury grand marquis with 240,000 mi on it. I am the second owner and I do all the maintenance on the vehicle and there isn't a thing wrong with it, original engine and transmission.  I drive it all the time and  I still see alot of the old body style crown vics and grand marqs on the road.  What I don't see are a lot of 20-25 year old foriegn cars on the road. If they are so great were are all of the old ones at?? Maybe some of you should read comsumer reports and read what they had to say about the ford fusion and the toyota camery, according to the ford has surpassed toyota in intial quality.

carylyn,

You really have great insight ---- I'm betting you are involved in the industry at some level. I hope people realize you have the right insight.

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