Page 9 - ROA Online Riview Library

INSIDE A In the last issue, we looked at what it takes to establish a Buick dealership.

New Car Sales, Part 2 BY RAY KNOTT

BUICK DEALERSHIP Now we will examine new car inventory and sales.

PLANNING—A “Planning Potential” is established by GM based on an
agreement with the dealer after determining the size, location and expected
sales at their dealership or “store.” The dealer’s expected sales are set by GM
based on the community, past sales, distance from neighboring dealers and
the percentage of competitive brand sales. The agreement includes the size
of the showroom as well as the size of the lot in which new and used cars
are displayed. The dealer’s performance is measured periodically by Zone
Managers. Included in their reports are sales, customer satisfaction, finan-
cial performance, employee retention, and sufficient number of personnel
to provide satisfactory service.
HOURS—The hours of operation vary from state to state. Many states have
“Blue Laws” requiring that the dealership be closed on Sunday. For many
dealers this is welcomed, as it gives everyone a day off with the knowledge
that even your competitor is closed. Hours of operation vary across the
country, ranging from 7 am – 9 pm, with a 9 pm closure.
ORDERING—The dealer orders a variety of models expected to meet the
needs of his community. The manufacturer may also give the dealer an
“allocation” of cars by model. The dealer is not forced to take the entire
allocation but may find it difficult to get more unless another dealer isn’t in-
terested. GM might offer “sales incentives” or “flooring assistance” to entice
a dealer to buy certain models. A “sales incentive” could be a limited rebate
or zero percent interest. “Flooring” is the industry’s term for borrowing
money to pay for inventory. “Flooring assistance” could be delayed billing or
interest. GM could also package “hot” models with slow ones to encourage
their purchase.
The Riview July/August 2019 9