Market wise? Yes. As far as I know, Northtown never had any intention of moving over there. They already have a large market where they are and a Taj Mahal to go with it.
It was originally supposed to be temporary and they wanted to build a dealership further north on Transit. However, Toyota won’t allow it and now they are stuck there.
If you ever need to sell it, you can only sell it as a car dealership…seeing as its locked in around car dealerships. It would be very peculiar for a Budget or rental place to come in and spend $5 million on a building.
Don’t get me wrong, the location is awesome. It’s just that when you’re all said and done, and have spent $10 million on everything (figuring low numbers on building, lot, franchise, inventory, renovations, equipment). The store MIGHT clear $500k a year. Remember, that is figuring low numbers during the acquirement, and high profits. :bloated:
Not to mention West Herr just dropped several million on West Herr Honda. At least when W. Herr took over Auto Place Toyota, you had a customer base for service (even though AP pissed off every service customer that ever walked in)…but West Herr Honda doesn’t have any previous service customers from ANYONE/ANYWHERE.
Hell All the Downing’s that you see on our Towne Commercials that own Towne make 10’s of Millions every year and they all drive Explorers/mountainers And really take of all us employees
While every owner/owners wife/owners kids/managers drive Lexus’ or Ferrari’s at Northtown and dont even give out a christmas bonus :picard:
Beck I hear what you are saying about reinvesting, but take a look at Paddock.
That building is in a bad location (every other store around there is gone), no major updates to the store, small lot on site, and the equipment in the back from what I hear is past it’s prime (didn’t a car drop off a lift last year).
There is also something to be said for keeping extremely low overhead so you don’t have to make as much on each deal.
I mean he has sold at least a 1,000 (?) more new GM vehicles this year than anyone else is the area.
I didn’t mean invest it back into the dealership as far as updating the premises’ and making it look pretty. I’m talking about investing it into the working capitol. Keeping the money within the system.
The first order of business while owning a dealership and making it successful is to have a large amount of working capitol and inventory in parts. After you’ve succeeded here, your first order of business should be to start buying and owning your used cars. You don’t want them to count against your floor plan and you certainly don’t want to pay interest on them.
After you’ve successfully purchased all your used cars, you are going to want to start buying your new cars, instead of keeping them on floor plan and accruing massive amounts of interest every month.
The first sign to look for when pinpointing a failing dealership is a lack of used cars on their lot.
You’re correct about overhead though. Most dealerships have too big of a building for what they really need. I mean Fucillo has massive buildings and lots, and generally sells less vehicles than lot’s half his size. Keep in mind, he has to keep the lights on, pay the mortgage and heat the place in the winter and cool it in the summer. I wouldn’t want his utility bills, with the minuscule output he produces. Not to mention service/parts make up a large portion of revenue. No one but Grand Islander’s take their cars to him. Why would you? Its so far off the beaten path, its hilarious.
I think the number one way for a dealer to be successful is covering cost with service and parts revenue and then car sales and F&I are just a bonus.
That way when sales are down you can rely on your service/parts revenue.
I remember reading in automotive news (maybe F&I mag) about a dealer who covered a 120% of his operating costs with service/parts.
He had no appointment necessary policy and open 24/7 for service. Plus a price match policy on parts.
That is what a fairly high ranking manager told me when I worked at WH.
I’m really curious to see what is going to happen with all of West Herr’s employees and buildings when GM closes up a lot of its franchises. I worked there during the time the place was exploding. I remember as they were building the Chevy Hamburg store I asked myself “Why are they building a Chevy store, literally down the street from their own Chevy store in Orchard Park?” :picard: They were spending money to compete against their own dealership. At least when they had their store in Eden, they were the only Chevy show for quite a distance. I thought the Toyota/Lincoln/Merc thing in Williamsville was a good idea. Given the direction of things, it doesn’t hurt to have another Toyota franchise, and they needed to regain their Lincoln/Mercury customers they lost when they closed their Dansville shop. When I was at the Ford store in Hamburg, we had a lot of people who wanted and got Lincolns and Mercs delivered in Hamburg, but we needed the franchise, so that is how we did it.
I just wonder how many more will close. I just went to Ford.com and did a search for dealers near me.
Dave Smith Ford
West Herr Ford of Amherst
Basil Ford
DeLacy Ford
Gambino Ford (Ford needs to update their site and remove that one)
Towne Ford
Steve Baldo Ford
West Herr Ford of Hamburg
Howell Motors Inc
Those are all within 20 miles of 14221.
Toyota on the other hand, there are 5 within 20 miles.
Honda = 4.
That’s a big difference in overhead and diluted sales.
My only argument for this is that it cost nothing for manufacturers to keep dealers open. Let the strong dealers with a good business models survive and the others will eventually go away. Plus customers like additional dealeships, so they can get work done closer to home.
But dealers feel the manufacturers owe them something and most will be bought out when they are on their last leg to help the dealer save face.
I would argue that there are costs to keeping dealerships open, especially bad dealerships. There may be intangible costs like brand dilution and negative image quality when failing dealers engage in bad business practices. I would ask how much is the image of the national brand either created, reinforced or destroyed by your neighborhood dealer network?
ps…how is med school treatin u dumbass lol