Car Industry Analysis

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Car Industry Analysis Since the beginning of the car there has been history of used car sales and since World War II boom in auto sales there has been an increasingly large amount of used autos being sold. Immediately following World War II, there were roughly nine buyers for every new car produced. Sales personnel merely had to find out who could afford a new car. "Afford" was defined as paying cash. This condition existed until the early 1950s when supply began to discover that some new terms were creeping into the retail salesperson's vocabulary. Words like "overallowance," "discount," "deal," and "terms." The emphasis, however, was still not on product but on price. In addition, the asking price was no longer final. There was also, if you could haggle a little, a taking price. It was possible to bargain with the dealer for the first time. During the 1960s, other new merchandising techniques were introduced. "Sticker price," "fleet price," "hard sell," "50 over invoice," "high-powered advertising," and "free" accessories were but a few new innovations. The buyer was becoming better educated, better able to buy—thanks to 24- and 36-month payments—but still confused and fearful of price. "Good deals" became "bad deals" after talking to friends and neighbors. Caution became the watchword when buying a car. The advent of the 1970s brought more confusion to buyers with new procedures like leasing, 48-month payments, credit unions, rebates, and consumer advocates. However, in defense of the consumer, books on "How to Buy a Car," "Invoice Prices U.S. Cars," and "Used Car Buyers Guide," were published and sold by the millions. During the 1970s automobile salespeople became conditioned to the notion that customers were interested in only one thing—the very lowest price. The automobile showroom atmosphere didn't change very much from the 1970s to the 1980s. Most retail salespeople saw the business of selling automobile as an "us against them" hard-sell game. Those who sold popular Japanese products became arrogant and insensitive to their customers and those of us who sold American vehicles continued with the approach that price, and price alone, sells vehicles. As the 1980s came to a close, however, the winds of change began to impact the retail automobile marketplace. Today, in the 2008, the business of retailing automobiles is quite different than it has ever been in the past. In today's marketplace, 5 out of every 6 cars sold in the United States are used.

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