GM Culls 245 Canadian Dealerships

by Robert Farago

Published: May 21st, 2009

CTV.ca reports that GM emailed 245 of its 700 Canadian dealerships notifying them that they’re the biggest losers. According to CNNMoney, this time ’round, GM isn’t basing its dealer downsizing on simple volume. “The auto maker said that, due to the ‘unique aspects’ of the Canadian dealer network, its rationalization efforts will focus on key urban markets. ‘The end result in Canada will be a more competitive dealer network with higher volumes, while continuing to maintain the strongest and broadest dealer network in the country better equipped to serve GM customers.'” In theory. In practice, this is only the General’s opening salvo. The friendly fire is sure to get worse when GM files for C11 at the end of the month.

Robert Farago

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Monty on May 21, 2009

According to thess stories: http://www.cbc.ca/money/story/2009/05/20/gm-dealerships-dropped.html?ref=rss http://ca.news.yahoo.com/s/capress/090520/business/gm_dealerships GM isn't actually closing all of the dealerships, some dealers will just not get their franchise agreements renewed when they expire in October 2010. And the figure of 245 is just the start. Apparently GM wants no more than about 375 dealers when all is said and done.

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Gmbuoy on May 21, 2009
Highwayman: "The rural guys aren’t the problem, they typically have the highest customer loyalty and satisfaction scores." Agree with you except when the rural dealer becomes a whore and will sell vehicles to used car dealers or off make dealers in other markets for 500 over. Even CFO of GM said rurals were the strength of GM in the Feb 09 submission to congress. Emails were sent because if letters had been sent it would have taken two or three days in someplaces for fed ex to get the news to some dealers. Everybody knew what was up in one day. The too many stores in the gta's is the accident of history. Before the 1988 Hyundai Pony Verdict made it okay for imports to DUMP (sell vehicles at a unit loss profit) the network was right sized. Last new GM dealership appointment in toronto was 1991 (other than saturn, nuff said). Most of those dealers have survived till now but with the new realities of the Made-In-New-York-City Worldwide Credit Implosion it is about to get much, much uglier. This program will allow the dealerships to wind down their dealerships in a dignified manner and give their employees the time they need to find alternate employement.

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Psarhjinian on May 21, 2009
I thought that having a Chevrolet dealer sandwiched between a Pontiac and Buick dealer facing a Saturn/Saab was common in the States too. That would be Courtest Chev above, stuck right up against Popham Pontiac-Buick-GMC and just down from Queensway Saturn-Saab-Hummer. I used to frequent Queensway for warranty work on my 9-3. I'd feel bad for Queensay's owner if he wasn't already quite well off. What you don't see is the eight other BPG dealers, or the seven Chev dealers, or the two Saturn/Saab dealers all within a 10km radius. Madness. There's not as many dealers combined for the other brands, even adding in Ford and Chysler, in that same area, and GM marketshare in Toronto is behind that of Toyota or Honda. I have no idea how these dealers make money, especially since they all sell the same goddamn cars. Forget rural dealers, the urban concentration is stupid. More than 10% of that 245 could be in the GTA alone, and GM has floated these guys for far too long. Remember the Uplander/Relay/Terraza/Montana? The reason GM does stuff like that is to give dealers something to sell that was in some way different from the exact same vehicle with a different nose that was on sale across the street. The smart thing to do---fifteen years ago---would have been to let every dealer sell any vehicle from any of GM's brands, eliminated the artificial overlap, and let the dealers fight it out as nature intended. But that would have required someone at GM to have a) forethought and b) fortitude.

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Akear on May 22, 2009

After reading all this I am certain GM's marketshare will never surpass 15% by 2012.

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