GM to Lose 520 More Dealers Through "Attrition"
According to Automotive News [sub], GM plans to shed an additional 520 dealers through “attrition” by the end of 2010. AN does the math: 1380 (by corporate fiat, so to speak) + 520 (attrition) + 500 (HUMMER, Saab and Saturn’s disappeared) = 2400 dead franchises trading. Given that many stores have overlapping franchises, I’m not sure how many dealers GM will have at the end of the federally-sponsored day. In any case, GM is on the ropes on the coasts and tanking in Texas. The bankrupt automaker needs a wide spread of smaller dealers to cover their last redoubt (the heartland). Still, one wonders what the ideal frnachise network size should be, and this process of attrition. More specifically, what will GM’s market share be and what’s GMAC’s role in this “inadvertent” downsizing? Is the lender—sorry, “bank”—continuing to make life difficult for GM stores? In other words, are Government Motors’ dealers fading as GM’s market share continues to tumble or will they be pushed? Or both? Oh, and AN reports that GM dealers are having something of a morale problem. Ya think?
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"How come it’s okay for Toyota to have only 1,200 dealers, but people are outraged that GM is paring their dealership count down to 3,600? It seems to me that clearly, GM is still going to have too many dealers to support even after the cuts." Shabster, this question keeps on getting asked. The paring down had to happen given GM's circumstances. The shame and the outrage is that it took government action to make it happen, rather than GM figuring out how to do it themselves as their market share continued to decrease over the last couple of decades. Under the best of circumstances it wouldn't be a nice thing - firing people never is - but at least it wouldn't be at the behest of the PTFOA.
...and on a related topic, the Dodge dealer here is closing for good - today is its last day. This is not one of the dealerships that was on the original closure list.
"AN does the math: 1380 (by corporate fiat, so to speak) + 520 (attrition) + 500 (HUMMER, Saab and Saturn’s disappeared) = 2400 dead dealers trading. Deduct that from GM’s current roster (6000) and New GM will have 3600 dealers." There is surely some overlap here. There's a Cadillac-Hummer dealer here in PDX...the dealer will still be here, though he'll only be carrying Caddies presumably. So is that a "closed" dealer? Do your typical Pontiac-Buick-GMC dealer count as three dealers or as one? Does anyone know how many physically distinct addresses (i.e., independent businesses) that 6,000 number is? And what the post-cull number will be?
afabbro Good point (made by others as well). My bad. Text amended.