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Originally Posted by s32741b
chrysler is going to kill their dealers with 1. the new awful floorplan program. 2. new vpa type two-tier pricing 3. not buying paper on their own autos unless buyer is gold . 4. lack of new product. I think the final straw is when an 2009 unit is a year old and the dealer has to payoff 50% of invoice. I am a B level dealer and i checked the other day to see what i would pay on my inventory if the program was in now and i would to take $137500.00 out of working capital just for this month.
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s32741b - Excellent post - Welcome to DealershipForum.com
I share your concern - unless Chrysler Finance makes some concessions I think a number of dealers will be forced out of business once they have to start paying down aged units in January.
Using your example, how many struggling stores could just write a check for $137,500 to pay down aged units? What's worse is that given the tight credit markets it's not likely that a dealer would be able to get a Capital Loan to bolster his cash position.
There's a large dealer on the West Coast that stepped-up and ordered 80 Dodge Sprinters and based on what I can see I don't think they're selling. How would you like to be the dealer that has to payoff 10% of that bill every month once those vehicles become a year old?
It will be very interesting to see what the "take rate" is on Chrysler's Push/Pull incentive - I'm guessing that a number of dealers will just opt-out.