trisport

... owned by the manufacturers or the test vehicle should be owned by the manufacturer(?). Not sure how it would really work but I like these ideas - the old business model is not really working for me (maybe a generation issue too?)

Also, I'm annoyed when I want to test an Avant (but have to test a sedan instead) but am told 'just imagine a trunk back there' because the only Avant on the lot has already been purchased. Same goes for a manual transmission. There needs to be difference between 'demo' and 'new.'

TheWalrus

Costco sued one of the states (can't remember which) to go direct with alcohol manufacturers rather than through the state's liquor distributor. Back in the day, the state liquor distributor added value by centralizing purchasing from many different manufacturers. But today Costco has so much scale that they're actually more efficient than the state liquor agency and should go direct. The issue comes down to money, jobs, political connections, and inertia. In the meantime, the customer is paying more than they need to... Sound familiar?
There are plenty of examples out there. I'm 33 years old and believe me, there's an entire younger generation out there that questions the status quo of how we do business.

kerrydel1

I r an enjenire. I don't no biznus.

markcincinnati

Booze is a relatively easy one: in the US we "enjoy" a so - called three tier system and there are serious laws and lobbyists and PACs intended to keep it that way.

Further confounding the booze issue is that some states have "minimum state mandated" pricing -- OHIO DEMANDS a 50% markup from wholesale to retail. This is not the rule, but it is not the exception either (but this minimum markup is not growing, as far as I can tell.)

Booze is usually sold in protected territories -- so your same distributor brand will not be able to be sold to your customers. Bobs drive through can only buy beer for instance from ONE place.

For good or bad this is the effect of what happened exactly 75 years ago. We will be living with it, far as I can tell, at least 7 years and probably more like 7 x 7 years.

Car dealerships are often somewhat similarly controlled not by Adam Smith's hand but by your elected official's hand: franchise laws, rules, regs and on and on and on.

Of course the unintended consequences of all of this is what is called fractionalization and what ever the opposite of disintermediation is called (reintermediation, perhaps?)

Now then, here we are with too many [American Car] dealers, yiedling an ineffective supply chain, lower profits, marginal businesses and marginal practices, perhaps; AND, higher prices and less than stellar service, sometimes.

We are nearing a tipping point, perhaps described accurately but prematurely by the authors of Blown to Bits, but coming soon -- disintermediation? Perhaps.

Consolidation? That would be my bet.

Fractionalization? Well, I'll bet this will run rampant before it goes the other way.

So Car dealers, somewhat like booze distributors are facing the twin perils and promises of consolidation and fractionalization.

Fewer dealers selling more kinds ("brands") of cars -- and doing so more effectively and more efficiently. Perhaps the inventory will be owned by the dealers, perhaps by the suppliers, beats me.

Perhaps too, dealers will carry little inventory and mass-rapid-customization will finally blossom.

Perhaps cars will come ONE WAY, fully loaded, and the features and functions can be turned on with software or attached and unattached like modules in a multi-piece sectional sofa.

Funny people will build and buy houses and wait weeks, months and sometimes years -- their second largest purchase, a car, they "gotta have it now!"

Maybe this will change.

I buy as much as I can from Amazon -- but, hell it takes two whole days to get to me; how can I continue?

My wife's car 7 weeks from Germany to Cincinati, mine, well -- 6 months, but that is another story for another reason.

We need, from an efficiency standpoint, the consolidation to accelerate (little dealers eaten up by bigger ones) and likewise a proliferation of brands that ARE DIFFERENT.

Hmm the GMC Acadia is barely different from the Chevy version, the Saturn Version and even the Buick version -- why not build, at most, a Chevy version and a Cadillac version and call it a day?

Fractionalization should mean DIFFERENCES not just hood ornaments and trim pieces and dashboard layouts.

Car dealers and obviously now Car manufacturers are sitting ducks if they don't stop their inefficient and apparently ineffective ways.

The rules, currently, seem to favor little disintermediation -- but customers seem to want it and even seek it out.

Now, I need some 150% of cost booze!

TheWalrus

I wasn't giving you a hard time. Making the point that in business school this is a core concept.

token1

Just took delivery of a 2.0 Premium Plus in Aruba Blue Premium with a Cardamom Beige interior, wood inlays, and navigation/camera.

$1048 on delivery (bank fee, doc fee, tire fee, registration)
Monthly payment = $545.51 with tax

I received a $1500 cap cost reduction as a loyalty discount from Audi. Also, the first month's payment is on Audi.

SFV A4

Would love to see pics of that combo.

MML

Any pictures of your car? Sounds like a nice combo...