05-01-2013, 01:32 PM | #16 | |
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My guess is Moshe will be less concerned about volume and more concerned about net profit. He commented that the threshold seems to be about $200K/year on the pro-forma. With a small overhead a rural dealer could probably hit $200K/year on a light mix of new and used cars. |
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05-01-2013, 03:50 PM | #17 | |
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05-01-2013, 05:07 PM | #18 |
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By definition, anything that is not urban is rural. But I am sure that you did not mean to ask that in your question.
We consider rural dealerships those who are located at least 30 minutes outside of an urban zone and/or urban cluster. Those dealerships vary in size of course and typically located in towns with population under 10,000. Those dealerships typically represent domestic brands, are too far from being able to pump into the nearby urban zone and typically (depends on market size) sell less than 500 new vehicles per year. More accurately, they sell 300 to 500 new vehicles per year. Surprisingly, we receive a rather large number of inquiries from buyers for such stores:
A good rural dealership should do very well in the service department. A good dealer/owner gets involved in the community, takes care of his/her customers, sells 300-500 new units per year, and twice as many used vehicles, if possible. With honest dealing and leveraging local relationships the dealer is able to maintain good grosses and therefore can make a great living with income that can range from as low as $200K to as high as $750K per year. Moshe Stopnitzky www.performancebrokerageservices.com |
05-02-2013, 09:36 AM | #19 | |
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There's part of me that's still very nostalgic toward the role of the rural dealer in his/her community and I'm reluctant to face the reality that smaller dealers face more challenges today than they did 20 years ago. I still think a rural dealer can prosper, it just takes a more work and talent than it did in the past. |
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05-02-2013, 09:43 AM | #20 | |
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05-02-2013, 09:44 AM | #21 | |
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I liked the comment about a "life style" dealership. Over the years I've known Dealer Principals who were nearing retirement and they wanted to buy another dealership near the area they planned to retire so they would feel connected to the community. In fact, I believe one of Chrysler's Regional Managers bought a CJD store in Napa, CA after he retired for that exact reason. On a different note, it's worth repeating that Chrysler's top volume retail dealership for several years was Dave Smith Motors in Kellogg, ID. Kellogg only has a population of 2,105 people... |
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05-02-2013, 12:52 PM | #22 |
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I'm not familiar with the Idaho store, but reminded me of a guy I went through GM's Dealer Candidate School with back in 1983, by the name of Frank Halvorson from Jackson CA, a small town on the western edge of the Sierra Nevada mountains in the old gold rush country about 60 miles southwest of Lake Tahoe. They were the largest volume Chevy dealership in the US at that time, handling many, many thousands of fleet deliveries for companies all over the country, out of an old "middle of downtown" 1950's building in a town of less than 3,000 population. As I recall, Frank said they had 80 employees that did nothing but paperwork, make readies, and transport for the fleet deliveries. Haven't talked to him in years, and seeing this thread I googled his store and was saddened to see that he had been forced to close down in December of 2008 when GMAC pulled his floorplan after he was 16 days late on his "FACILITY" payment. He had given in to pressure from GM to build a big new branded dealership 20 months prior to the credit crunch. As you can imagine, such a business model (thousands of units, at $200-300 net per unit, required a massive amount of floorplan capital to function, and he was unable to obtain another source at that time. His brother David is still in business in a Chevy store in Modesto, CA and said he was able to survive because he was in an older building that was paid for.
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05-02-2013, 01:57 PM | #23 | |
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05-02-2013, 03:14 PM | #24 | |
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Watch this and tell me there should not be outrage. DealerEx I had to look for and find this, it made me cry that Sunday morning. Little did I know I would be with him, without a dealership, less than 6 months later. |
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05-03-2013, 08:56 AM | #25 | |
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By looking at the map of originally effected dealers in our state, GM wanted no dealers that were less than 500 units(the one exception is a former NADA president). That would have left 6-8 dealers in the nations fourth largest state, geographically. Any < 100 unit dealers were wiped out or quit on their own(with the exception of the guy that now has our franchises and sold 48 new units last year). And as we know they are working hard to get rid of the rest of the small guys. Too bad the mom and pop stores that help build and support these communities are being labeled as poor performers and cast aside. X- Dave Smith is a very unique example of a large dealer in a small town. And a great example of what GM/Chrysler would let you get away with if you were pumping out that kind of volume, but I'll save that for a different thread. |
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05-03-2013, 12:54 PM | #26 | |
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05-07-2013, 01:53 PM | #27 | ||
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I'll copy the above posts to the thread about Prospect Motors and continue the discussion there. |
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05-07-2013, 02:42 PM | #28 |
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Another small/rural GM Dealer Closes - Jason Black Chevrolet
Sadly, here's another example of a small/rural GM dealer who's decided to close his dealership because he cannot keep up with his OEM's facility demands and the increasing levels of governmental regulations.
Jason Black Chevrolet of Sharpsville, PA has closed down. Here's a link to the full report - click here |
05-07-2013, 07:10 PM | #29 |
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Sad day for sure. Jason Black was a great partner when I was a Chevrolet dealer, did many dealer trades. He also was an great partner for AutoSoft he was a beta test dealer for many products. Since ASI is only 5 miles from his dealership.
I was reminded of a comment left on a newspaper article about my dealership closed... "As the retail world changes, small rural car dealerships are fast becoming extinct. The massive capital requirements, facility requirements of the car companies, and the customer demand for large inventory have pushed out the small local businesses. Take a close look at those left for they have a very uncertain future." Sad but true |
05-08-2013, 10:11 AM | #30 | ||
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It's sad that some small/rural stores continue to struggle despite the fact the entire industry is recovering from the worst recession since the Great Depression. |
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