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Posted by James D [Email] (more from James D) on Thu, 4 Dec 2003 12:29:19 Share Post by Email
In Reply to: Sorry JamesD but that is incorrect >, ChipJ, Thu, 4 Dec 2003 11:57:31
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Yes but the market is regional and taking the Boston market for example there are really only 2 dealership I can take my car to: Charles River SAAB (slightly disadvantageous location reflected in their prices being about 10% lower) and Herb Chambers (very good location, and they know it with the prices being the highest in the Greater Boston area). Subsequently there are also only two trustworthy Saab indies that I have been able to find one of which is very poorly located (10 minute walk to the nearest public transportation) or another one which is a hole in the wall located on a bus line. The fact of the matter is that Herb Chambers (the big and well located dealership) will price as high as the market can bear all other competitors will price around that discounting by the added "cost" associated with their disadvantageous locations.

As for their capacity utilizations, the big dealership services about 5 major makes and as stated by the service manager himself "tries to keep their service techs as separate as possible" which means, if there are no Saabs to service, the tech is lent to the Honda service bay to do an oil change or to the state inspection kiosk, etc etc etc. Its an ingenius setup...this dealership's bread and butter come from Toyota and Honda brands with BMW, SAAB, and INFINITI located on the same premises where they can make really high margins off low volumes of service and sales.

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