Automotive

patrick_y
[PuristSPro Moderator]
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Car dealers have pretty thin profit margins...

A watch dealer typically has a 40% to 45% profit margin but makes almost no money on servicing the watch, and watches don't require servicing very often.  Car dealers on the other hand generally have a 15% margin on the car (sometimes more, sometimes less) but do make a big amount of money in servicing the car.  It's quite possible they lost money selling the car, but will make it up in service.  But that's just the function of the marketplace, and when they do lose money, they should to it as graciously as possible.  Heck, they want you to come back for service don't they?  It's also a principal/agent problem.  The principal (owner of the dealership, which could be stockholders if it's part of a big group like Autonation which is a public company) wants you to come back for service, but the sales manager and sales person doesn't benefit if you come back for service.  Also, Alfa Romeo is not a brand known for brand loyalty, unlike Mercedes-Benz or BMW, which enjoys repeat business.  And the sales people who work at Alfa Romeo all look at it as a stepping stone to get into a more lucrative brand.  So it's understandable why they were behaving the way they did.  It's the car business...  Tesla on the other hand is quite different.  The sales team there behaves very differently.  Each dealership is owned by Tesla too. 

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