As GM's Dealer Cull Wraps Up, Few Benefits Materialize

Edward Niedermeyer
by Edward Niedermeyer

As Automotive News [sub] reports, GM has gone ahead and finalized the 500 dealer cuts that made up its bankruptcy-bailout-era dealer cull, despite resistance from some 22 members of the US House of Representatives. And despite the congressional pressure, a damning SIGTARP report, and an ongoing criminal investigation, GM hasn’t changed its tune about cutting dealers, telling AN [sub] that delaying dealer cuts

would only divert our collective attention at a critical time and would ignore the independent decisions of arbitrators and individual settlement agreements between GM and its dealers

Meanwhile, just what affect has the dealer cull had on surviving dealerships? Are they thriving? Well, not exactly…


Automotive News [sub] looks into the performance of surviving dealers, and finds a decidedly mixed bag.

At Flemington (N.J.) Chevrolet-Buick-GMC-Cadillac, General Manager Jeff Parker says service revenue is up 5 percent this year, in part because of referrals from a wind-down Chevrolet dealership 25 minutes away that closed in June…. Parker says that though his Flemington dealership has seen additional service work, he hasn’t seen an increase in new- and used-vehicle sales from the closing of Malek Chevrolet in Hopewell, N.J. He says he is concerned that those customers are looking at non-GM brands…

…Several GM dealers last week reported only a trickle of new business as a result of the wind-downs.On the other hand, some dealerships report a healthy increase in sales.

Of course, some dealers are seeing upticks in sales as a result of other dealer closures, but they tend to be in less-densely populated areas.

Bennett Motor Co., a Chevrolet-Buick store in Cheraw, S.C., has seen a 20 percent uptick in new- and used-car sales since its two largest GM competitors in rural Chesterfield County were wound down by GM, says General Manager Vic Gardner.

He expects his store will sell just over 100 new vehicles this year.

“We’re the only franchise Chevrolet dealer now in the entire county,” says Gardner, whose store is about 70 miles southeast of Charlotte, N.C.

Meanwhile, GM itself has admitted to the SIGTARP and congress that it expects no actual savings from its dealer cull. GM insists that fewer dealers is helping dealership profitability, but admits that improved products and an economic upswing is probably doing more. Meanwhile, GM’s overall sales are up only six percent compared to the ten percent increase enjoyed by the overall market. As long as GM’s sales underperform the market, culled dealers will question the wisdom of the sales channel blood-letting, but the real issue is the SIGTARP’s pending investigation. This story isn’t over by a long shot…

Edward Niedermeyer
Edward Niedermeyer

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  • SCE to AUX SCE to AUX on Nov 02, 2010

    Toyota has 1/2 the dealer density that GM does, and they have no trouble selling or servicing cars. I'm totally unsympathetic to any efforts to stop GM from culling dealerships.

  • FleetofWheel FleetofWheel on Nov 02, 2010

    If you follow the flawed logic of industrial/environmental planning, you would advocate that the GM/US govt open new GM dealerships in low income neighborhoods with heavy emphasis on Volt sales. If think that's silly as low income people don't buy new cars let alone high tech electro cars, then you see the folly of 'build it, mandate it and sales will come' policies.

  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
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