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Old 06-04-2009, 07:19 PM   #1
Nickdfresh
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Default How buying a car is going to change

How buying a car is going to change

With Chrysler and GM in bankruptcy, a new auto-buying landscape is emerging. And if you're car shopping, act soon; the bargains won't last much longer.

By U.S. News & World Report

It's business as usual. That's what General Motors and Chrysler want car buyers to believe as each automaker charts its way through the biggest financial crisis in its history.

It's also wishful thinking. As the two companies, which control nearly one-third of the U.S. car market, work through bankruptcy, they are undergoing profound disruption. Ford, Toyota and several other automakers are losing money and revamping their own operations. On top of that, the Obama administration is speeding up the pace at which car companies need to introduce new technology, cut tailpipe emissions and make major gains in the fuel efficiency of their fleets.

With the whole U.S. economy in flux, in fact, there's probably no industry being transformed more rapidly than the car business. Here are some of the changes that will hit consumers over the next several years:

Higher sticker prices. It's a buyer's market right now because sales are terrible and automakers are still building more cars than shellshocked shoppers worried about the recession can buy. There may even be some fire sales over the summer, as nearly 3,000 GM and Chrysler dealers slated for closing shut down and liquidate their inventories.

But the sweet deals will probably dry up by the end of the year. Most automakers are aggressively cutting production to halt chronic overbuilding, and as inventories get leaner, prices will rise. Fewer GM and Chrysler dealerships means there will be less competition to drive down prices. And the administration's tougher mileage requirements will force automakers to adopt expensive new technology, such as direct-injection drivetrains and advanced transmissions, that will ratchet up the sticker price. For consumers who can afford it, the time to buy is now. (See "Fire-sale prices lift GM, Chrysler.")Cars in Aisle 6. Just about the only place to buy a car these days is a traditional dealership, thanks largely to powerful franchise laws in most states that keep other competitors at bay. But as automakers slash their retail networks, dealers are losing their clout. For new offerings such as minicars, and perhaps cheap Chinese imports, a big showroom with a dedicated sales staff might not even make sense. That could open the way for retailers like Costco or Wal-Mart to start selling cars.

"A lot of new business models could emerge," says Craig Cather, the CEO of forecasting firm CSM Worldwide. "We could see some crazy things in the next few years."

In Mexico, for instance, at least one retail outlet sells Chinese-made cars alongside other types of consumer products. There's no reason such a model couldn't migrate north.

Toyota at the top. With the Detroit automakers trying to shrink their way back to profitability, it seems inevitable that Japan's Toyota will end up as the No. 1 seller of cars in the United States. GM has long been the market leader, with U.S. market share of about 19% today, compared with 17% for Toyota and 16% for Ford. CSM's projections show Toyota edging to the front of the pack by 2011, with Ford right behind and GM a close third. Those three automakers are likely to cluster at the top of an intensely competitive market for the foreseeable future.

GM on the rebound. GM's sales are sure to dip for a year or two, as the sprawling automaker winds down four of its eight divisions, right-sizes its dealer network and struggles to retain skeptical customers. But GM could once again become a powerhouse -- and Chapter 11 could help.

"GM's going to light it back up before long," says Gary Dilts of J.D. Power & Associates. "They have a pretty good product plan, and once they're out of bankruptcy they'll leave 10 years of debt on the side of the road."

One suggestion from Dilts: Company executives should stop referring to "GM," which consumers associate with problems, and rely more on the company's Chevrolet and Cadillac brand names, which still have strong traction in buyers' minds.

Saturns from overseas. GM's plan calls for unloading this money-losing division, but Saturn's not dead yet. This earnest brand for straight-talking folks has a number of assets that make it likely to draw a buyer: an expansive network of nearly 400 dealerships, modern facilities and a well-known and accepted brand name.

Penske Automotive Group is one potential buyer, with a plan to stick the Saturn name on vehicles imported from South Korea. Chinese-made vehicles might even end up as Saturns. For the time being, GM will continue to provide vehicles for Saturn stores. But at some point, Saturns will morph into something altogether different.

An endangered Chrysler. Company executives wax buoyant about Chrysler's prospects once it emerges from bankruptcy and finalizes a merger with Italian automaker Fiat.

But it won't be nearly that simple. Even if it sheds debt and streamlines, Chrysler will still be a damaged brand that lacks competitive products until Fiat-built vehicles hit the company's lineup, which could take two or three years. Fiat doesn't plan even to invest money in Chrysler, and the government has capped its commitment at a very modest $6 billion.

CSM forecasts that Chrysler's market share will fall from 11% today to less than 3% in 2012. For a mainstream brand that can't get away with premium pricing, that's close to the minimum threshold for survival. Which means the turmoil in Detroit is far from over.

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Old 06-04-2009, 07:44 PM   #2
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Default Re: How buying a car is going to change

It is already drying up. I'm looking for a new Charger V8 to buy for work and there ain't any available without them being SRT8 packages and I only need the basic one.

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Old 06-04-2009, 07:51 PM   #3
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Default Re: How buying a car is going to change

No V6 models?

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Old 06-04-2009, 08:10 PM   #4
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Default Re: How buying a car is going to change

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No V6 models?
It is a special purpose vehicle and being paid for by Uncle Fed & it was specified that a V8 was what they want to see purchased. It is free so we cannot really argue the point.

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Old 06-04-2009, 08:49 PM   #5
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Default Re: How buying a car is going to change

The article points out some reasons why prices could rise but it doesn't address the other side of the equation which is the ability of potential consumers to pay the higher prices. The loss of high paying jobs in this country will also create a loss of more affluent customers who in the past created higher demand for vehicles and in turn drove up prices. Sooner or later the market place will create an equilibrium of supply and demand. It seems to me that the US government is betting that the balance point of supply and demand will involve production of a lot less vehicles for some time to come and is therefore forcing the downsizing of the industry. Only time will tell for sure but it now seems likely that a lot fewer Americans will be buying new cars simply because they want them as opposed to those who wait until they actually need them.

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Old 06-04-2009, 09:00 PM   #6
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Default Re: How buying a car is going to change

Buying at a car dealer is bad enough, do you really want to buy a car from Wal-Mart, Costco or Best Buy?
"My car doesn't start, can you fix it?"
"Did you buy the Service Plan?"
"No"
"You'll have to send it back to the manufacturer."

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Old 06-04-2009, 09:01 PM   #7
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Default Re: How buying a car is going to change

Quote:
Originally Posted by piney View Post
It is already drying up. I'm looking for a new Charger V8 to buy for work and there ain't any available without them being SRT8 packages and I only need the basic one.
Charger or Challenger? I figure there should be still quite a few Charger V8s.

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Old 06-04-2009, 09:41 PM   #8
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Default Re: How buying a car is going to change

Quote:
Originally Posted by davidsky View Post
Buying at a car dealer is bad enough, do you really want to buy a car from Wal-Mart, Costco or Best Buy?
"My car doesn't start, can you fix it?"
"Did you buy the Service Plan?"
"No"
"You'll have to send it back to the manufacturer."
yeah right...you can't even find anybody to ask questions to in those places.
And when you find somebody, you're lucky if they get what you're saying....
you gotta love walmart

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Old 06-04-2009, 10:45 PM   #9
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Default Re: How buying a car is going to change

Quote:
Originally Posted by piney View Post
It is already drying up. I'm looking for a new Charger V8 to buy for work and there ain't any available without them being SRT8 packages and I only need the basic one.
I was thinking about picking up a SRT8 from one of the closing dealers that have a few days left to get rid of inventorty. I'd just to sell it shortly after and make some off of it after getting the good discounts on it. None here seem to have any SRT8s

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Old 06-05-2009, 05:06 AM   #10
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Default Re: How buying a car is going to change

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Originally Posted by davidsky View Post
Charger or Challenger? I figure there should be still quite a few Charger V8s.
The 4 door one. Needs the V8. After an inventory search, I found a couple on the Internet. Gotta have the purchasing folks look harder. There have to be some available.

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Old 06-05-2009, 08:33 AM   #11
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Default Re: How buying a car is going to change

It was those dare REBATES that began much of the purchasing issues.


US vehicles have a varied resale vaule just because of this. As well a lackluster quality control.

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Old 06-05-2009, 08:37 AM   #12
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Default Re: How buying a car is going to change

Quote:
Originally Posted by plato View Post
yeah right...you can't even find anybody to ask questions to in those places.
And when you find somebody, you're lucky if they get what you're saying....
you gotta love walmart
The last 3 times I've bought a car I did the research on the internet, decided what I wanted with what packages, figured out the list price and did an inventory search of the local dealers on their internet pages. Emailed a couple dealers my wants and offer on XX stock #, got an email back with acceptance and total cost break down. Went to the dealer, went to the cashier and gave them my check, signed the paperwork and left. Only question I needed to ask anyone at the dealer was "Where's the bathroom".

I already know where the bathroom is at Walmart and Costco.........

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Old 06-05-2009, 02:03 PM   #13
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Quote:
Originally Posted by piney View Post
The 4 door one. Needs the V8. After an inventory search, I found a couple on the Internet. Gotta have the purchasing folks look harder. There have to be some available.
I found about 4 myself, maybe the purchasing folks are confusing the R/T with the SRT.

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Old 06-05-2009, 02:08 PM   #14
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Originally Posted by s3nfo View Post
The last 3 times I've bought a car I did the research on the internet, decided what I wanted with what packages, figured out the list price and did an inventory search of the local dealers on their internet pages. Emailed a couple dealers my wants and offer on XX stock #, got an email back with acceptance and total cost break down. Went to the dealer, went to the cashier and gave them my check, signed the paperwork and left. Only question I needed to ask anyone at the dealer was "Where's the bathroom".

I already know where the bathroom is at Walmart and Costco.........
A lot of people still go to the dealer knowing nothing about the car they want to buy, or even what car they want.
I don't think they need to get rid of dealers, they just need to get rid of commissions.

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