Comments on: Ford Wants to Buy Out Development Program Dealers http://www.thetruthaboutcars.com/ford-buying-out-minority-dealers/ The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 23 Nov 2009 05:48:33 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Landcrusher http://www.thetruthaboutcars.com/ford-buying-out-minority-dealers/comment-page-1/#comment-211942 Landcrusher Tue, 11 Mar 2008 04:31:23 +0000 http://www.thetruthaboutcars.com/news-blog/ford-buying-out-minority-dealers/#comment-211942 The reason the development dealers do not want to sell is that they don't own the dealerships. The way I understand it, the program takes people who can't afford dealerships (often minorities) and helps them become dealers by taking an equity stake in the dealership. IOW, Ford owns a large percentage of these dealerships. The dealers involved have to buy Ford out with profits. If they are still in the program, it's because they don't yet own the store. Ford likely sees these stores as ones which they actually CAN close, but if I were a guy who had risked a lot of my own money, and who had been working to buy Ford out over time, then I would not want them coming in and trying to kill the deal. The reason the development dealers do not want to sell is that they don’t own the dealerships. The way I understand it, the program takes people who can’t afford dealerships (often minorities) and helps them become dealers by taking an equity stake in the dealership. IOW, Ford owns a large percentage of these dealerships. The dealers involved have to buy Ford out with profits. If they are still in the program, it’s because they don’t yet own the store.

Ford likely sees these stores as ones which they actually CAN close, but if I were a guy who had risked a lot of my own money, and who had been working to buy Ford out over time, then I would not want them coming in and trying to kill the deal.

]]> By: RedStapler http://www.thetruthaboutcars.com/ford-buying-out-minority-dealers/comment-page-1/#comment-210462 RedStapler Mon, 10 Mar 2008 19:36:32 +0000 http://www.thetruthaboutcars.com/news-blog/ford-buying-out-minority-dealers/#comment-210462 In some locations I could see this backfiring. Ford could put some of its weaker dealers out to pasture only to discover next year they are now selling for brand X. They are giving a nice opening to a potential market entrants. This is why Procter & Gamble has 300 different brands of detergent on the isle; they don't need to offer that many but it poses a formidable barrier to entry to potential competitors. All of the US 2.8 have a hopelessly bloated dealer structure. In some locations I could see this backfiring. Ford could put some of its weaker dealers out to pasture only to discover next year they are now selling for brand X. They are giving a nice opening to a potential market entrants. This is why Procter & Gamble has 300 different brands of detergent on the isle; they don’t need to offer that many but it poses a formidable barrier to entry to potential competitors.

All of the US 2.8 have a hopelessly bloated dealer structure.

]]> By: Sherman Lin http://www.thetruthaboutcars.com/ford-buying-out-minority-dealers/comment-page-1/#comment-209832 Sherman Lin Mon, 10 Mar 2008 16:27:36 +0000 http://www.thetruthaboutcars.com/news-blog/ford-buying-out-minority-dealers/#comment-209832 Yeah I don't get it. If you are not making money take the cash and if you are making money turn it down. Sounds easy enough to me. I seem to recall an article in AN about Ford dealers simply closing shop and turning in their franchise. So these dealers with an offer should consider them selves lucky Yeah I don’t get it. If you are not making money take the cash and if you are making money turn it down. Sounds easy enough to me. I seem to recall an article in AN about Ford dealers simply closing shop and turning in their franchise. So these dealers with an offer should consider them selves lucky

]]> By: quasimondo http://www.thetruthaboutcars.com/ford-buying-out-minority-dealers/comment-page-1/#comment-209702 quasimondo Mon, 10 Mar 2008 15:52:59 +0000 http://www.thetruthaboutcars.com/news-blog/ford-buying-out-minority-dealers/#comment-209702 On one hand, I can understand the reluctance of some of these minority dealers to accept the buyout. On the other hand, Ford isn't the only dealership in town, and with the money they get from Ford, plus the already established facilities they have, that Ford dealership can easily become a dealership for Mazda, or Hyundai, or Kia, or... On one hand, I can understand the reluctance of some of these minority dealers to accept the buyout.

On the other hand, Ford isn’t the only dealership in town, and with the money they get from Ford, plus the already established facilities they have, that Ford dealership can easily become a dealership for Mazda, or Hyundai, or Kia, or…

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