As hard times hit the auto industry in the early ’30s, dealerships had to rely on their parts, service, and used car departments to keep the lights on and the doors open.
Courtesy of the National Archives, we have a wonderful old Chevrolet film, produced by Jam Handy, that tells an old and familiar tale of the retail automobile business. When the economy goes sour and new car sales evaporate, dealers fall back and focus on their service, parts, and used cars operations—-often neglected when new-car sales are booming—to cover the overhead, stay in business, and maybe even turn a respectable profit. Indeed, it’s one of the oldest stories in the car biz, and it continues to this day.
Of course, when this film was made the economy could hardly get any worse, as the USA was slipping into the Great Depression. From a record 5.3 million cars in 1929, sales plummeted to only 1.3 million units in 1932, and unemployment in the nation’s manufacturing cites topped 50 percent. This film provided dealers with some helpful reminders on using their back-end operations to stay in business. Rare for a factory training film, the scenes include plenty of Chevrolets from previous model years to help drive home the message. And we are treated to some priceless glimpses inside the Chevy dealers of the era, including vintage shop furnishings and equipment. It’s a trip back in time. Video follows.
This is the truth. I worked in Oldsmobile dealers for 34 years and yes, every time the economy slowed down the dealer owner discovered the back end again. The rest of the time we never saw him.
And this is still the case. There is more money in many used than new. Only top of the line models have a decent earn in them. But new gives the choice of trade ins. Often more money in F&I and accescories than the vehicle.
Service and parts should always make good money. And people come back IF they are not terribly overcharged and the job is done properly. Many will pay a premium price for that,, just not too premium.