As dealers shifted from selling cars (flow) to servicing the large installed stock of existing cars, and as the auto business bundled three separable functions—sales, service, and financing—the only places profit was actually made were financing (GMAC) and service, while manufacturing and sales merely broke even, suggesting service and financing were the less competitive, tied-good segments.

causalpending

Speaker

Michael Munger

Evidence Quote

the only way the cool thing about this industry is bizarre the only place people made money was on financing and service

Source

Michael Munger on Franchising, Vertical Integration, and the Auto Industry 06/22/2009EconTalk
Created: 6/17/2026, 10:31:26 AM

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