Car dealerships are returning to their old routines

Article by Christian Andrei, on May 30, 2012

Car dealerships are returning to their old routines of spending a lot of money to get the vehicles off their lots. It had seemed that after the economic crisis of the last few years, no factories or dealerships would go back to the previous practices that led to their struggles. Dealerships then realized that they could earn more when they run a tight ship and that it was unreasonable to raise the volume of vehicles if they had to spend a large amount of money to sell them.

The wholesale and retail business was being run in an orderly manner. However, we now see the return of stair-step incentives, which had created confusion among producers and dealers. The pressure is on as after a few years, each manufacturer would have to raise its performance. At the last car show, automakers released their sales predictions and amounted to about 25 million cars and trucks. Each company intends to widen its market share by at least 10%. With many careers at risk, it’s possible that there would not be much concern about causing collateral damage and they would go back to the old habits. [source: Autonews]

Topics: dealership

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