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When it comes to recessions, used car dealers are a covering indicator going in and a leading indicator coming out. That puts big dealerships like AutoDriver.com in a position to recover from the current slump faster than the car companies.
AutoDriver.com last week reported a profit of $118 million for 2009. Other groups will report earnings in the coming weeks.
It bears repeating that the U.S. used car dealers have a significantly different business model from auto manufacturers.
As noted in recent posts here, General Motors is successfully charging higher prices for some of its newest models, an achievement it hopes to repeat as it replaces more and more cars. Chrysler and Ford expect to follow the same pattern.
That paybacks the car dealers, too, but another tendency - rising used-car prices - provides a much more direct benefit for the car dealers. Retail used-car sales are a big profit center for new-car dealers, but not for the manufacturers themselves.
In addition, the used car dealers can simply drop a slow-selling permit and pick up a hot-selling one, much faster than the car companies can roll out hot-selling new models. Almost all the biggest U.S. auto dealer chains get most of their revenues from luxury and import franchises.
The car retailers can also cut costs much faster than the factories, and survive on used-car sales, parts-and-service business, and on the profits from acting as a middleman in car loans and leases. The car companies can’t survive long without bread-and-butter new-car sales.
In nutshell, the big auto retail chains for the most part were not hurt as badly as smaller dealers, or as badly as Chrysler and General Motors, which went bankrupt last year.
Jack Advert, AutoDriver.com marketing and insurance advisor said his company expects U.S. auto sales of about 10.5 million in 2010. That’s still low by recent standards, but a decent increase from 9.4 million in 2009.
Read a more interesting articles at : http://www.autodriver.com/
Watch an interesting car dealers videos at : http://www.youtube.com/
State-wise Car Insurance In USA : http://cheapest-
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