European Stars And Stripes (Newspaper) - May 15, 1985, Darmstadt, Hesse                                Daily Magazine for car buyers Bojoh Holusha new York times the automobile Dealership of the future May have taken Root on the Southeast Side of san Francisco by the the san Francisco with models from six different car companies under one has More in common with a beguiling shopping mall than with a traditional car customers Are free to stroll a Central aisle and browse among the ply Saab and Alf Romeo models on within that Broad salespeople Are forbidden to accost the customer can wander into a car oriented Bookstore or pause for Coffee in a Mezzanine level the Auto enter is the creation of Martin who established it two years ago despite some grumbling doubts from the Auto companies swig consolidated his five franchises and two service shops at this and the idea seems to have proved last sales jumped to cars from before the swigs break with the time honoured Way of Selling cars comes at a Point when All automakers Are eager for greater control Over the Way their products Are they want to Cut distribution costs which can eat up 30 percent of a cars retail Price make it easier and More pleasant to buy a the with the general motors in the apparently have concluded that the time has come to revamp a dealer system that goes Back to the Days of Henry Ford and his Model the retail end of the business is the next big Frontier of cos cutting and innovation in this said John Hemphill of Power a Market research this is where the action is for the next 10 the Auto companies All say they want to work with their not disenfranchise though the trend is toward fewer the ones that survive Are larger and but some plans being advanced would fundamentally alter the dealers role As the Independent owner opera Tor of a diversified a pillar of the local Busi Ness not car dealers see a threat to their Many Are Rushing to protect their investments by acquiring As Many different brands As to reduce their dependence on the actions of any one Man and where drastic change has been at dealers have resisted bitterly in the Auto people say pm tipped its hand with its highly publicized Saturn Small car they sur Mise that pm established Saturn As a new and Semi Independent corporation mainly to let it set up a new distribution network and negotiate its own labor con unfettered by existing i see a lot of indications that the most novel thing about the Saturn car will be in the Way it is said customers walking past displays at the san Francisco new York times photo John an automotive specialist at the Baker Sloane consulting people in the automotive Industry predict that the Saturn which Are intended to compete against Low priced will be sold through High Low markup dealerships More like a discount appliance store than a traditional Auto these new outlets May Well be situated wherever Consumers As in shopping Saturn dealerships May do without service which involve High pm May authorize National Auto repair such As those operated by tire to perform warranty work and other by some an overhaul of dealer operations could easily save a that would go a Long Way in helping Saturn overcome the Cost advantage that the japanese enjoy on Small importers of japanese locked into conventional franchise agreements with would be hard pressed to match the Roger chairman of acknowledges that Saturn dealerships will be new and we wanted to explore if there is a better Way of serving this he its a lot better to do that with a new dealer than with an old dealer who i dont want to give up this unless i get according to pm will decide on terms for the Saturn which Are not expected to go into operation until near the end of this dealers can take it or leave a consulting Allen concluded in a recent study that nowadays the typical Auto dealer is in six distinct businesses new car use car and finance and the business of Selling and servicing cars is with revenues totalling about in some of these dealers have been fewer dealerships and larger revenues declining number of Auto estimate of franchisee new car at beginning of the in thousands 30 of  new car 25 All in billions of dollars average per dealer in millions of dollars South a a Donil automobile Baton us  of losing some of their Market share to specialist Compa studies by the dealers association show that dealerships perform Only about 30 percent of All automotive service and most of that comes while the car is still under the manufacturers the shops specializing in transmissions or tuneup have taken work typically by offering lower Booz Allen calculated that about of the average retail Price of a car is added after it leaves the the figure includes advertising and marketing transportation and dealer according to Booz As much As could be saved by changing the Dealership particularly by or separating sales from other dealer Leonard a Booz Allen has outlined a plan that envisages a Meg dealer responsible for vehicle distribution and marketing in a relatively Large mar Ket this dealer would store lots of cars at a Low Cost site and provide service the actual sales would mostly be made through conveniently located sales few cars would be placed at these satellite but a computer Hookup would let customers choose the color and options they want from cars in the Meg dealers Martin president of sector an Auto Industry consulting said sales operations of this sort have been established in some areas of the he drives Down the Cost of the distribution system by gaining economies of scale in land preparation and and the manufacturer can control product presentation in the Small show although pm officials say the Structure of Saturn dealerships remain to be there appears to be interest at the highest Levels in separating service from sales and simplifying the process of buying a Howard vice chairman of noted recently that its opel subsidiary in West Germany had authorized no dealer service that puts some Competition in the and i think it will come he Kehrl also said he thinks there is a better Way of retailing cars than we have he expressed Admira Tion for the k Mart k an outgrowth of the Kresge became a Success by Selling larger volumes of goods at thinner profit margins than traditional the pm said the company is also seeking to simplify the process of buying a possibly by introducing Price stickers that Bear some resemblance to what a car really Sells we have a very difficult pricing system Between ourselves and our with the manufacturers suggested retail with various dealer discounts and Holdback and wholesale inter est free Days and All Smith maybe it is time to take a new look at May 1985 the stars and stripes Page 13