The Dealership

Have you bought a new car lately? Probably not. With the economy in the tank, nobody seems to be buying anything, let alone a new car. My latest economy driven (no pun intended) assignment was to cover the decline of the new car dealership. Several Bay Area dealers have shut their doors in the past few months with many more poised to follow suit. Ellis Brooks Chevrolet, a San Francisco institution, decided recently to stop selling new cars before the end of the year and focus on selling used cars. Used cars turn a better profit than new ones. Ellis Brooks has been in the car business since 1939.
I spent close to 3 hours hanging around the dealership. In that time, only one customer came in. Just browsing, didn’t buy anything. The phone rang periodically. They had 11 calls the previous day. I chatted with the owner, John Brooks, who said they just can’t turn the profits that they used to selling new cars. The best they can get is a couple of hundred dollars over invoice and people are usually not even happy with that. Plus, nobody is buying them. SF Mayor Gavin Newsom even snubbed the local dealership and went out of the city to buy his Hybrid SUV. What's up with that Gav?
I had never thought of it before, but John told me that auto dealers are one of the only sales based businesses where people demand to know how much the product cost the dealer to acquire. We don’t ever question those Nike sneakers that probably cost eight bucks to make but sell for $150 or the bed that costs over a thousand bucks but probably costs a fraction of that to make. We just pay it. But when we buy a car, we need to know exactly what the dealer paid for it so we can throw them a few dollars over that price. That seems a little lame.
Time seemed to stand still in the showroom. The salesman named Bobby sat at his desk at the end of a row of empty desks. He worked the phones – nothing doing. It was eerily quite. Back in the day, dealerships like Ellis Brooks would sell 3,000 cars a year. Now they sell 300 if they’re lucky. Dealers are doing all they can to survive. Some have even discontinued the free coffee for employees and customers - anything to save a buck. It seems that it will only get worse before it gets better. If you live in SF and need a new GM car or truck, head over to Ellis Brooks before Decemeber 15. After that, no more new cars. They will give their remaining stock of new cars back to the manufacturer.