Waltham Motors
Essay title: Waltham Motors
An auto dealership can generate revenue via new car sales and used car sales and service. If I ran North County I would be concerned about developing a sales team that could help improve the margins in sales either through negotiation or volume. Also, good salesmen could provide good service to the customers such that they would return their for car repairs.
I think that profit on it should be granted to the used car manager because the new car manager sold the car with an allowance of $4,800, which is significantly higher than the $3,500 price in the book. While the guidebook value can vary by almost 25%, the new car salesman still provided a product allowance above this range.
I think the costs of the repairs should be added to the cost of the used car, at the wholesale price. The profits on the repairs should be calculated against the wholesale price because doesnt give the used car sales manager a perverse incentive to sell unrepaired cars or cars without profitable options for fear of hurting their margins.
The loss on the car is $1,800. I think $1,300 of the loss should be negative credit on the new car salesman, while