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He seems to have a point. Hard to see where GM benefits by having fewer dealers, on a scale of its problems. I suppose it has to provide stock on consignment, but what else are they going to do with it?
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Not quite sure how GM can 'axe' an independent business.
Refuse to supply vehicles?
He sounds like a good, sincere, guy and I hope he can keep his garage going with another franchise or independently.
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Not quite sure how GM can 'axe' an independent business.
They can terminate their franchise agreement. Presumably the dealer is painting the scenario that he would have to close, which could well be the case.
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GM is going to need to downsize in order to survive. By getting rid of dealers they are trying to reduce the possibility of a price war between different dealers in the same locality with the same product.
Also they are trying to reduce the number of stock vehicles and demonstrators which they have to produce to fill the show rooms and which are also sold at a heavy discount.
Additionally, in the recent past, GM have pushed their dealers to sell volume to keep the factories going, irrelevant of price, and have incentivised the dealers to do this with kickbacks at the end of each quarter. So basically the dealers have had minimal incentive to sell their products at a real market price. Add to this the money which is no longer made by selling finance deals, as there is no finance to sell, and it's clear that the car industry in the US is going to go through a painful adjustment.
The statement from the guy in the video that the dealers are customers of GM and that they don't cost GM anything is only partly true.
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Not quite sure how GM can 'axe' an independent business. Refuse to supply vehicles?
Definition of franchise:
an authorization to sell a company's goods or services in a particular place
Definition of axe (in this case);
to cut off.....
In the UK motor trade removal of the franchise normally means lack of access to the 'factory' ie up-to-date information, direct supply of vehicles, tools, training, parts etc.
many exfranchised dealers have in the past become independent specialists, but the manufactures are not always best pleased at that.
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I liked that Guy's presentation. Most people (75%) here in the Y UK are thick uneducated fools who can see no further than their next Burger or episode of home and away and some of their homes may indeed be going away!! But hey, why should they worry cos for some we will pick up the cost of keeping them. Maybe we should bail out (if that is the right term) Businesses that keep the majority going and let the Bleeding (sic) banks go to the wall. Stronger businesses will emerge, leaner and more willing to work and fight for retention of their market share. Like that Guy's employees we here in England, us middle class, hard working, tax paying, conservative viewing, generally law abiding citizens(s) have just about had enough of supporting leaches and single Mum's with more fat tums and if we stop 'paying in' where will that leave the dole merchants. I for one have had enough and the latest debacle in government has almost finished me off. HM should dissolve it now and go to the country and elect UKIP.
No connection and I don't vote co's I refuse to be on the register that says it is compulsory.
Rule Britannia..................MD
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GM to close up to 1,100 dealers......GM plans to cut the total number of dealers by 42% by the end of 2010.
news.bbc.co.uk/1/hi/business/8051978.stm
Thats an awful lot of people being hit due to big business screwing up.sma
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