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 MungerEvidence 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 06/22/2009— EconTalkCreated: 6/17/2026, 10:31:26 AM
My Notes
Loading notes...