Tuesday, June 9, 2009

Automotive News - Ed Lapham

Ed Lapham is reporting about the new legislation that's been introduced in the House of Representatives. This isn't about me, this is about customers. This is about making sure that customers can continue to get their vehicles serviced "just like always" as the President stated in his address to the nation. The argument that manufacturers need to eliminate dealers to save money is so far from the truth. Consider some very important facts:
1. Incentives are never paid in advance, meaning cars don't drop in value when a rebate is announced. The dealer paid the manufacturer when the car rolled off the assembly line, before it was every shipped. If the dealer sells the car, to a consumer, he passes a rebate on to the consumer, and then waits for the factory to reimburse him/her (the dealer) for the credit that the dealer gave the customer at the time of the sale.
2. Customers pay for "distribution." Every Federally mandated "Monroney" label or "Sticker" on a new car or truck includes a line item for "Freight". Freight means shipping, or distribution. For some cars, it's anywhere from $325 to $700.
3. Dealers are the "cost bearers" for the manufacturing of the parts too. Dealers order millions in inventory, that dealers pay for, to supply parts to customers at dealerships, gas stations and large chain service providers. Without the dealer warehouses, who are the customers, every day consumers are going to have a harder time finding parts too.
Write to your Representative...this is happening to you. It's in your home town.

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