Vidmar Honda-VW A shadow of its former self

[Loren Swelk]

If my counting is correct Vidmar has lost 5 automobile franchises in the last 3 years or so. Mazda basically took the franchise away for non-performance (or so the word on the street said). Oldsmobile went to visit Uncle Edsel and decided to stay. And now, Chrysler, Plymouth and Jeep. Word on the street is once again that Chrysler Corp was not happy with sales performance and hasn't been for a few years. It has to be tough to have a franchise jump across town along with the service and parts business that goes along with the sales end. The last time I took a vehicle to Vidmar for an oil change the young man who waited on me name tag said under his name "Resource Development". I wondered then what it meant. I now know that resource development means just what it says. When I got the estimate for the "work that needed to be done" and it was over $1,200 (which included replacing the brakes that they had done 3,000 miles ago, the last time they gave me "estimate of work needed") I was sure that resource development meant gouging the customer. Remember both times I took the vehicle in for it's 3,000 mile oil change and that was all. Well now I will try Pueblo Dodge. I hope that "Five Star Service" does not mean the same as "Resource Development.

[Sandra]

When I got the estimate for the "work that needed to be done" and it was over $1,200

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If my counting is correct Vidmar has lost 5 automobile franchises in the last 3 years or so.

Remember, the first 60 years or so, Vidmar Motor Company sold ONLY OLDSMOBILES . . Then GM decided Oldsmobiles didn't appeal to the younger Buyers . . and discontinued the venerable Make . .

Kinda left Ole Bill, Barb and an' th' Chillun's up a tree, so to speak . . Bill and Barb were smart enough though to latch onto the Honda Deal . . and everything else was just sorta frosting to keep the east side of Albany Street going . .

As for the Dealership Service Department . . ? When speaking of ANY Dealership or in house "Service Department" . . Think in Agricultural terms . . What does it mean when a Farmer has his Cow or Mare "Serviced"? . .

Aha . . now you're beginning to understand the terminology at use here . .

[BornInPueblo]

I worked in two new car dealerships in Pueblo from 1975 until 1989. The first one was Jess Hunter Ford-Subaru and the second was Aspen Motors VW/Mercedes Benz, which later became a VW/Dodge dealership after selling their MB franchise to Fortino-Jackson Chevrolet and buying the Dodge franchise from Faricy Dodge.

Suffice it to say that we failed as a dealership for at least three reasons: 1. VW’s became extremely unpopular when they abandoned the Bug and had mechanical problems with the replacement Rabbit, which they tried to represent as a luxury and advanced engineering phenomenon, of which it was neither (although the Rabbit GTI was an engineering marvel). 2. We attempted to be as honest, responsible, and service oriented as we could be, when many other dealerships were attaching additional charges to their MSRP window stickers and using high pressure sales managers on their staffs and had high service department labor rates and incentives to encourage high pressure service representatives to sell unnecessary service work. 3. Interest rates in the mid-80’s to finance inventories of new and used cars rose to around 20%, meaning that over a years time the dealership could pay 1/5th of their inventory value to the financial institution that allowed them to have cars on hand to sell. And Chrysler, including their Dodge models, decided that with the interest rates as high as they were, would force the dealers to take on inventories and finance them at those rates, instead of having to do it.

I don’t think we ever had a single month in our service department that showed up as a profit. Our parts department was basically supporting its expenses without showing much of a loss or profit. We either succeeded in the business or lost it from new or used vehicle sales on a monthly basis, although early on the VW bug was so popular that we had no problem succeeding.

The culture of succeeding in business has generally become one of expediency and profit from rewarding individuals who can generate revenues, rather than one that is providing a good service to their customers. I can only observe that the consumer is as much to blame for this as the businesses are.

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Probably the biggest change to the Automobile Retailer's Profits was changing from single Business to Departmental Accounting in the late 70's. Used to be, the sales of the new and used cars generated the profits that ran the dealership, and any other part of the dealership, Parts, Service, Paint and Body, sometimes made money, sometimes didn't, but were deemed a necessary part of the business . .

Then came departmental accounting, where each service or department had to make a profit . . and you then saw the "whittling" of services . . first went the Paint, Body and Frame and wheel alignment . . That was too competitive and and labor sensitive . . as well as requiring the dealers to become more sensitive to several health and safety issues which required major investments in their physical plants . . and when a new dealership was built, there was no "grandfathering" of facilities . . E.G: When Spradley bought Fortino-Jackson Chevrolet, they maintained a body shop on 9th . . until they moved to Highway 50 West. Then they just "Walked away" and now . . are no longer in the Paint and Body business . . it was just too expensive to build a state of the art shop and staff it . . they'd never recover their money . .

And now, the parts and service departments are all required to make a profit "with out" rather than be "Umbrella departments" and be carried by the Sales of new and used cars . .

When I first became associated with new cars sales, back in the early 60's, Used Cars were the profit on New Cars, essentially, unless you "High Grossed" a deal or the buyer didn't trade anything in . . often you didn't know exactly what the profit was on a new car until the total "wash out" or the "trading string" was ended . . That, probably was the first change in accounting, as by 1965 almost all of the dealers were making new car sales stand alone and then the sale of each used car was also individual profit or loss . . No more "wash out" system . .

Now, everything is done to make a profit on that action or service . . no more Mr. Nice Guy, or long deals . . You go to buy a car today, you might as well be buying a loaf of bread . . Your car is worth X dollars, and the new one is worth XX dollars . . Pay the difference, and prepare to take it in the shorts every time you come back to the Service Dept for Warranty work or service to maintain the warranty . .

Just another step in making the business as impersonal as taking a crap in a pay toilet . .