USA Today: The Big 2.8 "Cutting" U.S. Dealers

Robert Farago
by Robert Farago
usa today the big 2 8 cutting u s dealers

There's more than a little fact-glossing in a USA Today article on disappearing domestic-tied car dealers. "Having shuttered factories and eliminated hundreds of thousands of automaking jobs, Ford Motor (F), General Motors (GM) and Chrysler are now turning their attention to weeding out weaker dealers in bigger metro markets. They make fewer vehicles, so they don't need as many places to sell them." Translation: "weeding out weaker dealers" = paying off some of their dealers before the franchisees starve to death. "They make fewer vehicles" = losing market share like an hourglass loses sand. Although it's a tough job making people feel sorry for a car dealer, Chris Woodyard's tale of Keystone Ford's terminal illness gits 'er done– without dwelling overmuch on Detroit's culpability. Thankfully, there's some good old fashioned hard news here: the paper's [unattributed] Big 2.8 domestic dealer tally. "GM has reduced its dealerships by 229 to 6,807 in the past year; Ford had shrunk by 139 to fewer than 4,140 as of July; and Chrysler had eliminated 142 to 3,607 as of October." Compared to Toyota's roughly 1500-store U.S. dealer network, Detroit's numbers indicate Motown's still wearing a bloated albatross around its neck. So to speak.

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  • Cynder Cynder on Jan 03, 2008

    Continental Auto Group in Anchorage, Alaska has a stand alone dealership for Subaru. I'm guessing that they sell quite a few because they've now doubled the lot size. They also have excellent service and support--as a Subaru owner, I like that a lot! CAG does have dealerships for Nissan, Honda, Mazda, Volvo and Suzuki. Only the latter three sharing showrooms. Subaru and Nissan have a long history together from when Nissan was a stakeholder. Their partnership only ended when Nissan fell on hard times in the 90s. Subaru works with Nissan on various part sharing initiatives. That may not last with the new Toyota partnership.

  • Slow_Joe_Crow Slow_Joe_Crow on Jan 03, 2008

    With Subaru I think it depends on the area. Where I am on the west side of Portland (Oregon) the three nearest Subaru dealers have standalone buildings but are owned by multi-franchise dealers. Interestingly two are large Chevy dealers and all three have a Buick/Pontiac/GMC franchise, although some are in different cities.

  • Jthorner Jthorner on Jan 03, 2008

    I don't think the 2.8 are very actively pruning the dealer network. It is shrinking though as 2.8 sales continue their long, long slide. I know that in the Silicon Valley area at least one long time Lincoln Mercury dealer and another long time Ford dealer both simply called it quits. Both of them had been around for many, many decades and were sitting on land which was worth plenty while running businesses that were worth little.

  • Taxman100 Taxman100 on Jan 03, 2008

    My Mercury dealership opened as a Nash dealership back in the 30's. He became a Mercury dealer in 1954, and Lincoln in 1958 - over 50 years with Ford. It is guys like this that Ford is killing with their clueless product development. It is an old-school dealership - the owner doesn't sell, but if you want to talk to him, he is on-site. I absolutely hate those overwrought dealerships with the trendy showrooms, etc. - Lexus dealerships remind me of a shopping mall. Keep the overhead low, and provide good service - it works for me.