Quote:
Originally Posted by Homeslice
You are talking about long-term hypotheticals.
In the short term, inter-dealer price competition only hurts the dealers, not the manufacturer. The manufacturer gets paid the same amount for the car. Your hypothesis that it will hurt the market perception of the brand, and thus eventually force the manufacturer to reduce its price, is a longer-term hypothetical that may or may not be true. What if it also causes a customer to buy Chevy instead of Toyota because he was able to negotiate better at the Chevy dealer, while the Toyota dealer wouldn't budge? And flash forward to today, with fewer Chevy dealers around? Chevy customers won't be able to negotiate as well as they did before, therefore some of them might buy a Toyota instead.
Also, eliminating dealers causes a loss in brand awareness, since anytime you have new cars sitting on a lot somewhere, it is its own form of advertising.
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Unfortunately for GM, Chrysler and Ford it is not "hypothetical"
I have provided the information you require. If you are unable to process this information then that it is beyond my control. The only thing I can recommend to you is to take some economics course to put you in a position where you understand markets and then follow that up with some readings on the state of the auto industry so that you can apply lessons learned to automotive sector.