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Auto business going under?? Not going to happen. People want cars so businesses will always be there to provide them. Individual dealerships might go under but others will pop-up as needed to meet demand.

Auto businesses such as dealerships can go without/reduced cars for so long. The current business model isn't that sustainable if this supply issues goes on longer. Dealerships generally either eat the costs or cut the losses and close the business.
 

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The way things going, I wager more like the end of 2023-2024 that's if the auto business doesn't go under.
Auto dealerships make most of their money from the service dept....not the sales dept.
 
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I'm siting in the Honda dealership near my house getting my 2017 CR-V serviced. I was discussing how much I like my car with a salesman and found out they have absolutely NO NEW CARS for sale. The only cars they have on the lot are already sold.
I keep getting emails from the dealership (bought my CRV new in 2019) that they want to buy my car.
 

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The dealer that I bought my 2019 MDX from has send me several emails and letters asking if I am interested in selling my vehicle. They "promise" that they will pay me "top dollar" for my MDX. If I had something else to drive in the interim, I might have been interested in looking into this.
 

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I keep getting emails from the dealership (bought my CRV new in 2019) that they want to buy my car.
My wife drives a 2020 Crosstrek premium. The dealer she bought it from has sent her two emails offering to sell her a brand new 2021 Crosstrek premium for her car and $300 out the door. They must want used cars awfully bad. She only has 3000 miles on her car and likes it. She’s keeping it.
 

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Pretty much the same story here, though they did have a Black Edition Pilot for sale, for $52K. They got a Ridgeline in that was gone in 2 hours.
The used lot is a vast wasteland too.
The independent used lots seem to have a lot of cars, but unless I knew where they came from and under what circumstances I'd stay away.
There has been a lot of flooding lately.
(I just checked out of curiosity, that Pilot was sold the day I saw it)
Same with my dealer. They have about 15 pilots(21/22 MY ) on the lot. I was curious and my wife and I took a Elite out for a drive. Fit and finish was not that good -the gas lid stuck out from the body. The drive was terrible unless you like driving a school bus. Really, this SUV is nothing more that a lifted Odyssey. The nine speed trans sucked and the ride was stiff IMO. All this goodness for over 50k. I drove a 22 MDX las month- Now thats more like the real deal. Wait for the 23 Pilot which will be based on that platform.
 

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The dealer that I bought my 2019 MDX from has send me several emails and letters asking if I am interested in selling my vehicle. They "promise" that they will pay me "top dollar" for my MDX. If I had something else to drive in the interim, I might have been interested in looking into this.
Drive the 22 MDX . It is the real deal
 

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If it lasts very long (and I'm hearing mid-2020), we'll see dealerships closing or at a minimum consolidating. How do the salesman survive?
Our local Ford/Toyota dealer just sold to a group out of Salt Lake, who also bought dealerships in Colorado.
Whether this will be a good thing or not in the long run I have no idea.
Fortunately our Honda dealer remains locally owned, though somewhat short on new Hondas. :)
 

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Auto dealerships make most of their money from the service dept....not the sales dept.
True, and they make more on used vehicles than new ones, so they need those trades.
What new car sales does do is drive customers to the service dept., where, as you say, the real money is made.
I think this is where the dealerships will really get hurt, no new sales, no new service customers, though it will be a year or two for this to be really felt.
 
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True, and they make more on used vehicles than new ones, so they need those trades.
What new car sales does do is drive customers to the service dept., where, as you say, the real money is made.
I think this is where the dealerships will really get hurt, no new sales, no new service customers, though it will be a year or two for this to be really felt.
Exactly what I was trying to say. It sort of domino effect.
 

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Independence snd reliability are two completely different things.
As off topic as this is, yes I agree. IF we ask anything of our adult children, they are very reliable. As you mentioned, this does not mean they are not independent. Thank you for clarifying.

Re: New car dealers....They are very creative when it comes to making money. I doubt the lack of new cars on the lots will cause them too much harm. As was mentioned above, service and used cars sales bring in the most profit. And selling any new cars they can get at full MSRP (or above) will certainly help their bottom line as well during this strange time. I wonder if the manufacturers are giving the dealers additional behind the scenes financial assistance. They need the dealers to sell and service the cars they are able to put on the lots.
 
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While US CR-V sales were down almost 50% in Sept, they're still up almost 25% from last year. I would think they felt more pain in 2020 than now, but I'm not in the business. Overall, they're up ~20% YoY.

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If it lasts very long (and I'm hearing mid-2020), we'll see dealerships closing or at a minimum consolidating. How do the salesman survive?
Which helps set a context as to why many dealerships, not just Honda dealerships, are struggling to generate revenue run rates that keep their staff employed and the doors open. They are struggling to survive, and some will indeed fail or sell-out and retire.

I find it a waste of energy to personally deride dealerships for putting markups on MSRP (something classically done for decades in the US vehicle market) or offering "recommended services" during the current inventory and supply crisis. They offer... and I say thanks but no thanks and explain why and we move forward with "required services". As a consumer, I know that ultimately it is my decision on any vehicle sale or service.
 

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While US CR-V sales were down almost 50% in Sept, they're still up almost 25% from last year. I would think they felt more pain in 2020 than now, but I'm not in the business. Overall, they're up ~20% YoY.

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I agree that 2020 was much worse for the dealerships, and frankly most businesses that rely on facing customers.

And I think they were prepared to weather the downturn from the pandemic in 2020. But as it continues to persist and appears to now be shifting to "endemic" rather than "pandemic"... the pain continues for dealerships, though mostly through secondary issues in the world supply chain of components disrupting inventory supplies of vehicles.

And since nobody has visibility as to how long supply shortages are going to slow production, I can totally see how dealerships are having difficulty seeing "light at the end of the tunnel". I think it is uncertainty that is driving their selling behaviors now. And I think this has a cascade effect on the used vehicle market as dealers have the connections and capital to really shift to used vehicle buying and selling mode in the short term as long as they have supply sources lined up.

I do believe the pandemic and it's effects will drive many less customer focused dealerships out of business. The combination of big On-line vehicle selling of new vehicles, including delivery to your door, and more progressive dealerships adopting competitive selling models to these online companies will take a tool on some of the more traditional dealership business models.
 

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I agree that 2020 was much worse for the dealerships, and frankly most businesses that rely on facing customers.

And I think they were prepared to weather the downturn from the pandemic in 2020. But as it continues to persist and appears to now be shifting to "endemic" rather than "pandemic"... the pain continues for dealerships, though mostly through secondary issues in the world supply chain of components disrupting inventory supplies of vehicles.

And since nobody has visibility as to how long supply shortages are going to slow production, I can totally see how dealerships are having difficulty seeing "light at the end of the tunnel". I think it is uncertainty that is driving their selling behaviors now. And I think this has a cascade effect on the used vehicle market as dealers have the connections and capital to really shift to used vehicle buying and selling mode in the short term as long as they have supply sources lined up.

I do believe the pandemic and it's effects will drive many less customer focused dealerships out of business. The combination of big On-line vehicle selling of new vehicles, including delivery to your door, and more progressive dealerships adopting competitive selling models to these online companies will take a tool on some of the more traditional dealership business models.

Agreed, Last time I brought a vehicle earlier this year, the buying process is done all online. At the end go to the dealership for cold signing to finalize the paperwork. As a customer, it makes the process much easier. One thing to note is Carvana and Carmax are booming better than traditional dealerships because their business model is to sell/trade cars online. These two companies give you 7 days to test drive. I hope nationwide dealerships follow suit by conducting business online instead of the traditional in-person buying process.
 

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I do believe the pandemic and it's effects will drive many less customer focused dealerships out of business. The combination of big On-line vehicle selling of new vehicles, including delivery to your door, and more progressive dealerships adopting competitive selling models to these online companies will take a tool on some of the more traditional dealership business models.
Not just "less customer focused" but the smaller family-owned dealerships that may not have the financial resources to weather the storm.
Already happening here, I'm just hoping my Honda dealer hangs in there.
 

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around here, we have 6 Honda dealerships:
dealership 1:
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dealership 2:
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dealership 3:
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dealership 4:
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dealership 5:
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dealership 6:
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so, we aren't too bad considering what i've seen at Toyota, Ford & GM lots around me.
 

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so, we aren't too bad considering what i've seen at Toyota, Ford & GM lots around me.
Here we have 1 Honda dealership and 1 CR-V (1.5T in Aegean Blue). Doubt if it lasts out the week.
Pickups vastly outsell passenger cars around here. Finding a truck is hard.
Plenty of glittery optioned-out four-door "Pretenders", but if you want an actual "truck" you won't find one.
The Ridgeline doesn't sell well here, mainly due to the 5000 lb. tow limit.
It's hard to tell what's happening at our Ford dealer. They were bought out by a group out of SLC and it looks like they are bringing in stock from there.
 
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