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AUTO DEALERS MAKING TOO MUCH PROFIT ON NEW CARS, SAY CONSUMERS

 GLENDALE, Calif., Aug. 16 /PRNewswire/ -- Consumers think automobile dealers are making too much profit on new vehicles -- by up to 80 percent or more. This is according to a national study of potential new vehicle buyers recently conducted by The Dohring Company, Inc., a Glendale-based automotive research firm.
 "Consumers perceive dealers make much more profit on new vehicles than they actually do," said Doug Dohring, chief executive officer of the company.
 Survey respondents stated that automobile dealers make average profits of between $2,720 (on a $15,000 vehicle) and $8,800 (on a $45,000 vehicle) on the sale of new cars and trucks. This represents a perceived average profit of 18 to 21 percent on new vehicles.
 "The irony of these consumer perceptions is that when consumers were asked how much they would personally be willing for a dealer to make on their own purchase of a new vehicle, consumers provided figures that were significantly higher than the profit dealers currently make on new vehicles," Mr. Dohring said.
 Consumers participating in the study reported that they would be willing to allow dealers to make profits which averaged approximately 10 percent ($1,470 on a $15,000 vehicle/$4,080 on a $45,000 vehicle) on their own purchase of a brand-new vehicle.
 Figures released earlier in the year by the National Automobile Dealers Association indicate that America's car dealers actually make an average profit of only 6.7 percent on the sale of new vehicles.
 "This disparity between perceived profits, profits consumers are willing for a dealer to make on their own purchase and actual dealer profits demonstrates clearly that consumers are misinformed about new car dealers in this area," noted Mr. Dohring.
 Mr. Dohring also said that these results indicate that consumers are far from being "anti-profit" as they are willing for a dealer to make a profit and don't mind paying them for the service they provide.
 The national consumer telephone survey, which was conducted earlier this year, was based on a random sampling of over 1,200 respondents throughout the United States who intend to purchase a new vehicle in the future. The survey has a 95-percent confidence level with a plus/minus 2.9 percent margin of error.
 The Dohring Company is North America's largest provider of custom market research to the retail automotive industry. The company has conducted over 1,800 studies for individual dealers, dealer advertising associations and automakers. This year, The Dohring Company will interview over 150,000 automotive consumers on behalf of its clients.
 -0- 8/16/93
 /CONTACT: Rudi Loehwing of The Dohring Company, 818-242-1600; or Eric Hood of The Hood Group, 313-433-9651, for The Dohring Company/


CO: The Dohring Company ST: California IN: AUT SU:

JG-MI -- DE034 -- 3254 08/16/93 16:36 EDT
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Publication:PR Newswire
Date:Aug 16, 1993
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