I'm with FarEastWarriors on this.
The national dealership revenue breakdown is kind of the opposite of profit. Revenue is like 55:35:10 for new:used:service sales. But I would bet new car sales make the dealership $0 on average or close... used cars can be nice, agree there. But I would bet service margins are astronomical... I'd guess blind that is 75% of dealership profits. consequently, if you talk to someone who works at a dealer (assuming they aren't running it) they may not perceive how the money is made... or maybe I'm confused!
Some details here after some googling, basically says the service is most of the profits. ROIC for dealerships is high. New cars don't make a ton, used is more. Service is the most. (page 10) I guess makes sense re: new cars, they make money (haven't always in years past) but it's a loss-leader for service.
http://www.nada.org/NR/rdonlyres/DF6547D8-C037-4D2E-BD77-A730EBC830EB/0/NADA_Data_2014_05282014.pdfThis is a curious area, mostly because if electric cars really take off, they will turn the dealership model over and screw it... because the service aspect of an electric car should be fewer small ticket items, so I would imagine less need for a dealership.
I wonder if this isn't one of those businesses though that is perceived as dieing, but actually has a very long cash flow tail, with little competition and a strong competitive dynamic with car makers? Leucadia and Berkshire both jumping in... it will be interesting to see it unfold.