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Old 08-22-2011, 03:24 PM   #1
XDCX
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Default Dave Smith Motors is running full page ads in the Seattle Times

I made a quick trip to Seattle this past weekend and was surprised to see that Dave Smith Motors from Kellogg, ID was running a full page ad in the Sports Section of the Seattle Times newspaper.

For those who may not be familiar with Dave Smith Motors, they're a Chrysler, Jeep, Dodge, Ram, Chevrolet, Buick, GMC, Cadillac dealer in Kellogg, ID that made their fame by selling cars for $100 over invoice back in the days when allocations were tight. Dave Smith was Chrysler's highest volume dealer for several years running and because Kellogg, ID only has a population of about 2,500 people I think Smith's MSR was over 10,000%.

Concerning the ad in the Seattle Times, in the old days there seemed to be a gentleman's agreement that Smith wouldn't advertise outside of his market. Smith's main advertising tool had been the back inside cover of the Alaska Airlines in-flight magazine and that seemed to be all that he needed to keep his operation humming.

I wonder how long Smith's been advertising in the Seattle Times?

I wonder how long it will be until someone in Auburn Hills decides Kellogg, ID needs a Fiat Salon.
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Old 08-23-2011, 12:47 PM   #2
Lakeshow
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They've been advertising out of his market for years, and is even getting heavy time on XM/Sirrius the last couple years.

As a former dealer from a neighboring state, it's common to see vehicles with Dave Smith tags sitting out back for weeks on end waiting for warranty work. Not that I'd ever participate in something like that.

I remember in 2009 going there for a dealer trade and seeing Chrysler Financial and GMAC parked in the showroom with permanent desks. Hope that's changed for them.

Last edited by Lakeshow; 08-23-2011 at 02:14 PM. Reason: spellun'
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Old 08-23-2011, 01:45 PM   #3
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I remember seeing print ads all the way down in southern Oregon for Dave Smith since I was a kid. I always wanted one of those "1 at this price" Vipers.
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Old 08-24-2011, 08:24 AM   #4
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There was a dealer in Alma Georgia back in 1980-90s, Ronn-Rowland, they used to spend huge amounts on radio spots on just about every station on the dial selling $1 over invoice all new Chevys while trying to knock people out in F&I to put the gross on the back end.

They also had a store in Pine Mountain GA, "Mountain Chevrolet" which did the same thing operating during the same period of time. Both trying to fight with Bill Heard who did the same kind of sales formula, give up the front end and hope to make the back end which
in the end gets charged back anyway.

These were very small towns and the dealership facilities were older small buildings, sometimes with lots rented closeby for vehicle storage. This guy carried a huge inventory for these small market stores. GMAC was always babysitting these stores, until they closed him up for S.O.T., years later the same thing happens to Bill Heard.

At least the front end gross is yours to keep if you do it right, the back end is a different story.
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Old 08-24-2011, 10:20 AM   #5
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Quote:
Originally Posted by Lakeshow View Post
I remember in 2009 going there for a dealer trade and seeing Chrysler Financial and GMAC parked in the showroom with permanent desks. Hope that's changed for them.
Were you under the impression the CF and GMAC reps were in the store to ensure a SOT condition didn't develop or because there was so much demand for retail loans that it made sense for CF and GMAC to keep a rep on sight?

Even in the dark days I never got the impression that Dave Smith Motors was under financial pressure.
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Old 08-24-2011, 11:30 AM   #6
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Quote:
Originally Posted by rd3311 View Post
These were very small towns and the dealership facilities were older small buildings, sometimes with lots rented closeby for vehicle storage. This guy carried a huge inventory for these small market stores.
That's essentially the same business model that Dave Smith Motors uses. While they've upgraded their facilities over the years they started out with a small dealership and kept buying more storage lots as their operation grew. The last time I drove through Kellogg, ID it looked like Dave Smith controlled about half of the town's real estate.

Quote:
Originally Posted by rd3311 View Post
At least the front end gross is yours to keep if you do it right, the back end is a different story.
Great point - there's nothing worse than to start your month off deep in the hole because you've got a bunch of F&I chargebacks.

Concerning Dave Smith Motors, they never had a reputation for being a store with an aggressive F&I department - maybe that's part of the reason why they've managed to survive and prosper with their business model.
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Old 08-25-2011, 07:17 AM   #7
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I did not get the impression the GMAC and CF guys were there to write retail contracts. I chatted with the GMAC guy but didn't ask, so obviously that's an assumption.

A large portion of their income used to come from accessories. Anyone that dealer trades with them learned fast that their trucks were ordered without trailer packages, spare tires, and anything else they could delete to keep the invoice down(rear bumpers back in the day). They have huge buildings dedicated to accessory inventory and installation.

Anyone know what kind of numbers they put up? I heard rumors of 4-5k GM and 7-8K CJD units before all hell broke loose.
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Old 08-25-2011, 09:23 AM   #8
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Quote:
Originally Posted by Lakeshow View Post
A large portion of their income used to come from accessories. Anyone that dealer trades with them learned fast that their trucks were ordered without trailer packages, spare tires, and anything else they could delete to keep the invoice down(rear bumpers back in the day). They have huge buildings dedicated to accessory inventory and installation.
I remember Dave Smith hired one of their former DMs to run their Accessory Department several years ago - it was clear that the dealership was going to focus on accessories as a profit center. If I recall correctly, the dealership was doing so many spray-on bedliners on the trucks they sold that they started their own franchise.

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Anyone know what kind of numbers they put up? I heard rumors of 4-5k GM and 7-8K CJD units before all hell broke loose.
Here's a link to a thread that details their 2009 Chrysler sales - click here

To the extent 2009 was a soft year for Chrysler and Dave Smith Motors still managed to sell 3,176 units I'd have to guess they were selling over 5,000 units in 2006, 2007 and 2008.
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Old 08-25-2011, 02:55 PM   #9
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Dave Smith Motors uses a very Wall Drug-esque marketing tactic (at least for someone driving across the country)...they have billboards for hundreds of miles advertising this dealer and how big they are...and you just drove across Montana and didn't see anything worthy of note in the past 8 hours. So you are drawn to it like a moth to a flame.
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Old 08-26-2011, 10:26 AM   #10
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Quote:
Originally Posted by mr4t60e View Post
Dave Smith Motors uses a very Wall Drug-esque marketing tactic (at least for someone driving across the country)...they have billboards for hundreds of miles advertising this dealer and how big they are...and you just drove across Montana and didn't see anything worthy of note in the past 8 hours. So you are drawn to it like a moth to a flame.
That's a great point - I'd almost forgetten about those huge billboards with the pink background advertising Dave Smith Motors.

I bet there are some people who pull off the highway once they reach Kellogg, ID just because they want to see what they've been reading about for the past two hours.
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