We make money by making customers do what they hate most, which is going back to dealers

Aug 07, 2019,08:24 AM

" It's always a bit provocative when I say this, but there is something not very ethical about the car industry as a whole. 

We have traditionally made money on servicing cars, not selling them. 
So, we make money on making customers do what they hate most, which is going back to dealers."

But for us (Lynk & Co. who will offer cars on a monthly subscription), that's where we lose money, because the service is part of the [fixed monthly] cost. So the more our cars need repair, the less we profit.

This is from Alain Visser, a veteran executive with experience working at Ford, General Motors and Volvo. 

Alain has been CEO of automotive startup Lynk & CO since 2015. Zhejiang Geely Holdings is the parent company, now owner of Volvo, Polestar, Lynk & CO, Lotus and 50% of Smart. Li Shufu, head of Geely, is the single largest shareholder of Daimler with 9.7% of the stock. 

Instead of creating a traditional dealer network, Lynk & CO will offer subscriptions to customers, market its cars online, and sell through branded flagship stores and so-called "pop-up" stores.

What do you think about his statement "We make money by making customers do what they hate most, which is going back to dealers for service and repairs"?

That's EXACTLY my feeling. Despite the fact that I was in the industry (aftermarket service) and consulted with automotive parts and service companies for 2 decades, I HATE to go in for service.


PS - unfortunately I am ALSO tired of doing this stuff myself... in this first instance, my Volvo hood release cable broke. Threading a new one in took me 6 hours but the part was only $30. The dealer wouldn't do the job; they sublet it to the body shop who wanted about $600. 

Gads, is there no end to this?

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Buy a Tesla

 By: hewitgar : August 7th, 2019-09:03
not a lot of moving parts

not much emotion

 By: Weems@8 : August 7th, 2019-09:33
There are cars with not much emotion like Toyota. It are mostly not the cars, your neighbour think you won the jackpot. It are cars that always open the hood with a cable which do not break. If the cable break, and your Toyota is old, than even a Toyota d... 

This is probably a major reason for the prevalance...

 By: vitalsigns : August 7th, 2019-09:38
...of leasing (although there are other important reasons as well), where the lease term is at least coterminous with the warranty. …and the ascendancy of the Japanese import (made extremely well, and much cheaper to fix). I would not want to be out of wa... 

Be nice guys

 By: Jocke - Bad Santa : August 7th, 2019-10:37
The auto mechanic's needs to finace the watches in some way. LOLOL I have done this stuff everyday for 3 decades now.

He he he... [nt]

 By: amanico : August 7th, 2019-10:58

This is why I bought a Tesla...

 By: patrick_y : August 7th, 2019-11:55
I'm hoping the Tesla will be more reliable in the long run. We shall see!

Not sure I agree

 By: Jurry : August 14th, 2019-08:34
I’m not so sure if I agree on the statement made. 30 years back, yes I would have fully agreed. Authorised dealers were bloody expensive, body shops and “all brand repair” shops were unreliable at best. But since then a lot has changed: - reliability is w... 

The quote was from a guy who worked for GM, Ford & Volvo and he was talking mostly about the US and northern Europe

 By: cazalea : August 14th, 2019-09:02
The manufacturers are stuck with authorized dealers in the US due to protectionist legislation in almost all 50 states. Tesla is the only one bucking the system today, trying to sell direct and service at your home, work or in a factory service center. Th...  

For Captain Brownie

 By: Jurry : August 26th, 2019-05:10
I’m sure the pictures below will bring a smile to his face ...  

Hi Mike

 By: Jurry : August 14th, 2019-11:27
Obviously the situation in the US is completely different. You’re either in an area with towns and villages spread pretty far apart or you in highly densely populated areas and metropolises If you’ve only got 3 dealers each 40 miles apart, then having an ... 

I got my maid/nanny/gardener/nurse to help me change the oil

 By: cazalea : August 14th, 2019-12:00
Actually she just posed as if she were doing it herself. I have this nifty marine oil extractor - you pump the handle once or twice like bicycle pump; that creates a suction, and it pulls all the oil out the dipstick tube. You don't even get dirty hands. ...