Wow they can't make those cars depreciate fast enough?
Posted on 12/29/2008 8:29:06 AM PST by Graybeard58
Buy a new car, get a stake in General Motors.
That's the latest deal from Richard Chevrolet on Route 10 in Cheshire.
The dealership launched a stock-ownership plan two weeks ago — 50 shares in GM — to reel in reluctant buyers just before the holidays.
General Manager Jason Vianese said the dealership decided to try the program, which gives the buyer 50 shares after they purchase a new car, after learning about a similar offer from a dealer in the Midwest. Vianese said the company bought 500 shares and has sold about half of them in a week.
"It sounded like a good idea so we decided to try it here," Vianese said. "You always have to be innovative and on top of your game."
Richard Chevrolet isn't alone in trying something new to lure reluctant consumers into the showroom.
Auto dealers across the region are testing a range of offers and deals to entice customers despite the slow economy and shaky consumer confidence. Some dealers are banking on tried techniques, such as cutting prices and offering low financing, while others are promoting service deals.
Edmunds.com, an automotive research Web site, forecasts car sales for this year will total just over 13 million, three million less, or an 18 percent drop, from 2007.
Robert Reelick, owner of Robert Motorcars on Main Street South in Woodbury, said he's slashed as much as $3,000 from the used Volvos, Saabs and BMWs on his lot, but consumers are jumping at cars with price tags of $10,000 or less.
He said he's tried to buy lower-cost cars to pump up his sales, but other dealers have quickly snatched the vehicles up. The current rugged sales situation, he said, may be something dealers simply have to ride out.
"If you're out there looking, there are some good values right now," he said. "For the most part, people are hanging onto what they have and not trading their cars in. Consumer confidence is the big player here."
Another dealership is willing to go to customers' doorsteps to ensure they keep coming back for maintenance on their vehicles.
Ted Vandereedt, general manager of Honda of Watertown on Straits Turnpike, said employees will pick up a customer's car while they are at work and provide them with another vehicle, if necessary, while the dealership completes maintenance work.
"In this economy, we're literally trying to go the extra mile to show our clientele we appreciate their business," Vandereedt said.
Car sales across the state are down, with some decreases ranging from 30 to 50 percent, and the number of dealerships — 325 a year ago — now below 300, according to James Fleming, president of the Connecticut Automotive Retailers Association.
He equated the trouble to a tsunami — with the collapsing credit market quickly following the summer's astronomical rise in gas prices.
He said the sour economy has forced dealers to have to think more creatively to stay solvent.
"It's simply had a chilling effect," he said. "For most, a car is the second biggest purchase they will make in their lives, and they see what is happening all around them."
Fleming testified before the U.S. Senate Banking Committee earlier this month in favor of a bailout for America's "Big Three" — Ford Motor Co., General Motors Corp. and Chrysler LLC — something he said is necessary to boost banks' confidence in dealers who need credit to finance the cars they keep in stock.
"These businesses' needs have to be financed," he said. Fleming added that few dealers can actually afford to outright own every vehicle on their lot.
The White House has agreed to a $13.4 billion loan package to help the country's three largest automakers into the new year, with the possibility of making available an additional $4 billion in February.
Before the bailout announcement, Kevin Sullivan, owner of Sullivan's Northwest Hills Dealerships in Torrington, which includes Jeep and Chrysler cars as well as GM vehicles, said he sought out banks to make 0 percent financing offers available to his customers, and rebates as high as $12,000 for some larger SUVs.
Typically, the offers are financed through factories, but Sullivan said the manufacturers simply aren't strong enough to offer such rates on their own, so he's looking to banks to help him finance the offer in-house.
He said he's optimistic going into the final week of the year — typically one of the busiest for dealers — that customers will be out looking for a bargain.
"We're certainly not as busy as we have been in the past, but there are quite a few people who are in the market," Sullivan said. "If you have the ability, it's a fantastic time to buy."
Buy five cars and you’re the new CEO!
Wow they can't make those cars depreciate fast enough?
It’ll make great wallpaper. The stock isn’t worth squat. It is purely a trading speculative stock. The financials are horrible. GM is somewhere on the ocean floor with Titanic but the Titanic is in better shape.
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