SAVE   |   EMAIL   |   PRINT   |   RSS  
An Avalanche of woe
Want a trip through the car sales headlines? Just traipse through a few dealerships.
April 8, 2005: 7:02 AM EDT

Sign up for the Eyeopener e-mail newsletter

NEW YORK (CNN/Money) - The dealership was open, but you couldn't tell.

The customer parking spaces were empty and the looming glass windows were a bit dark.

Surprise, the door was unlocked. Yet the showroom, with 1970s-era wood paneling and decor, was empty. A salesman broke off from his compatriots gathered around a TV in a far back room and came to hover around us.

What a difference from the disco dealership: a Toyota place just down the road. It had ultra modern touches -- sitting areas with video terminals and floors with transparent Plexiglass tiles underneath showing high-tech car components.

And it was full of people ... some looking at the cars and some sitting down at the desks talking turkey with the sales folk. We looked at a few possibilities -- Siennas, big-cab Tacomas, a Highlander -- under the guidance of a fairly low key salesman. He tossed out a few hints about what deals were possible, but wasn't that sad when we decided to collect our literature and leave.

It was a busy place.

The Honda dealership across the street had a more snooty atmosphere. It was done up in polished wood and faux-antique carpet and furniture, with a potted palm here and there. Old Victorian parlor or New Orleans bordello ... I couldn't decide which they were going for.

As my kids crawled out of the Pilot on display, a guy came and sliced out the sticker on the window. It had been sold.

We ended up getting the literature we wanted from the receptionist. All the salesmen were busy.

At the Volvo place -- brightly lit in that stark, Scandinavian way -- we couldn't sit in the Cross Country. It was locked up. The people sitting at the desk next to it didn't want strangers climbing in and out of their new car. So we checked out a larger wagon instead ... once the family ahead of us got out of it.

But I'm kind of partial to big, honkin' SUVs. So I wanted to stop at the Chevy place (which carried some other GM brands as well) and check out the Avalanche and maybe a Suburban or two.

And here it was. Empty, except for us. And our own dedicated salesman, dying for us to take a test drive.

Geez, I knew GM was having troubles, but this was a headline come to life. Toyota place .. full. GM place ... empty.

"Is it fair to judge the state of a manufacturer by one dealership?" demanded the spokesman for an auto industry consulting group.

No. But it surely is a big hint.

"GM's way has been to attract consumers through incentives, but it isn't really doing that anymore. You may have been seeing the effect of that," said Shuba Srinivasan, a University of California marketing professor who has been doing research into the relationship between car pricing and automaker profits. "In the long term such a (discount) strategy is a negative."

She may have a point. I didn't see much in the way of deals at the Chevy place (except for this purple SSR pickup thing that was obviously in desperate need of a discount). And without some sweet deals, I didn't see much of a reason for being there. Apparently no one else did either.

So does my local Chevy dealer need to bring on the discounts? "Incentives alone aren't enough to get (GM) out of a jam," said Srinivasan. In the end, it comes down to products and buzz, she said.

"Our research shows that's good for the stock, too." she added.

Yeah. But I'm going to check on the price of that Avalanche next weekend again, just in case.


Allen Wastler is Managing Editor of CNN/Money and appears on CNN's "In the Money." He can be emailed at  Top of page


Wastler's Wanderings
Manage alerts | What is this?