GM To "Consolidate" More Buick, GMC, Pontiac Dealers
The Detroit News' story on Rick Wagoner's recently professed intention to continue consolidating Buick, GMC and Pontiac dealers is straightforward to the point of wondering why the Hell they bothered. GM's got too many dealers (14,118). Wagoner wants to trim the network. This is news? Alright then, we'll play. Given that all GM dealers are protected by their state's franchise laws, how exactly is Wagoner going to git 'er done? Is the General going to spend [some more of the bank's] billions and buy-out stand alone dealers? Are they going to swing their ax and defend their position in court? Or are they simply going to continue starving Buick/Saab/Hummer/Pontiac of killer product until the brands die of natural causes– or just long enough to force them to consolidate and then turn the models into variations of a single brand? Three brands? Four brands? Inquiring minds want to know! The closest scribe Sharon Terlep comes to providing an answer. ""We do it one and two at a time," GM Marketing Maven Mark LaNeve told her of the consolidations. "Every situation is unique." So now we know.
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As posted elsewhere, it looks like GM is going to take another tack by allowing any brand combination, as opposed to the current 'channel' strategy of BPG, Hummer/Caddy/Saab, etc. IMO, they'll get a lot further, faster, than trying to cajole the non-channel BPG dealers to combine. The dealers who haven't gone to channel typically have (i) kids in the business; or (ii) sufficient volume from non-GM franchises to hold off doing anything.
The first thing that usually happens is that the larger dealer networks will have the opportunity to buyout smaller/less successful ones IF the owners want to sell. The buyer will have the opportunity to take over the territory.... the physical dealership may remain or may be closed. If a dealership is failing and wants to close their doors, GM is usually very involved in making the transition as painless as possible. This is in very stark contrast to most foreign makes which have a tendency to be far more belligerent. Hyundai, VW, and Subaru have all experienced failed dealerships in my neck of the woods and the results were far from pretty. In Georgia, the Big 3 are inclined to minimize competition and maximize volume wherever possible. They want a dealership that can literally offer the exact type of vehicle the customer wants... and yes, that is really no different than anyone else with one important exception. The Big 3 will literally stock up to the point where this type of choice becomes possible for the overwhelming majority of models.
The dealership where I live has Pontiac, Buick, GMC, and Cadillac all in the same shop. The only ones missing are Chevy, Saab, Saturn, and Hummer. If you go on the lot you really see the badge engineering - it's pretty sad.
It makes sense to me. If GM is -eventually- going to wean itself from badge engineering, then it will be necessary to give most dealers something to sell in each market segment. I'm hopeful that consolidation is the begining of new brand identities - idnetities that mean something.