Analyst says dealer cuts 'didn't make any sense'

[1G6]

Originally Posted by 1999 White C5 Coupe

Tell me how GM is going to increase sales and market share?

It's happening right in front of you.

[GMCSonoma]

Originally Posted by Slack

Hey, the government broke the dealer networks. What to do...? Oh! Let's let the government have a look at it and try to fix it. I fail to see the logic in fixing bad government intervention with more government intervention.

I'm happy the government protects me in terms of being able to call 911 and I'll know that they will come!!!!

I sure wouldn't want private firms providing my police & fire protection...or fighting the wars, or keeping the waterways open...

disclaimer:
Now before everyone craps on me...I'm very apolitical and have no agenda to push here unlike others...

Some closings were justified, some not...

Of the closings I'm personally aware of about 75% were "justified" and about 25% weren't... I also know of one or 2 outlets that should have closed, but scathed by, why I'll never figure out!

[PeteM143]

In my part of the world, we lost one Chevy dealer in my hometown. It was sad to see him go, but there are two dealers within 20 miles of his location. At the end of the day, all he was doing diluting Chevrolet's sales for the dealers better able to handle the business the right way.

Funny part of the story is that particular location had been in trouble for years, all the way back to the time when I worked at GMAC in the late 80's. I live in a semi-rural part of NJ, by the way.

The other dealer who got absorbed by the local Ford shop was another one who had been in and out of trouble for years. I hear people saying how 'viable' these outlets are/were in these areas. It seems to me like the decisions made by GM kinda made sense. Ford and Toyota in my area have one store each in my market. They compete with Three Chevrolet dealers in the same locale. We're represented 3:1 with really good dealers. I'll take that any day.

[SuperSS27]

Originally Posted by GMCSonoma

I'm happy the government protects me in terms of being able to call 911 and I'll know that they will come!!!!

I sure wouldn't want private firms providing my police & fire protection...or fighting the wars, or keeping the waterways open...

disclaimer:
Now before everyone craps on me...I'm very apolitical and have no agenda to push here unlike others...

Some closings were justified, some not...

Of the closings I'm personally aware of about 75% were "justified" and about 25% weren't... I also know of one or 2 outlets that should have closed, but scathed by, why I'll never figure out!

I agree with you on everything you just said.

The ones that we can't understand why they closed could have legal problems that they cannot disclose to the general public. Maybe the dealer doesn't pay them back on time, or there are multiple law suits, or really bad customer service.

Its way to easy to speculate that they were wrong in this case since so many are being closed, but give it some time to see the results of the action before criticizing. In essence, this move is going to strengthen the overall dealership experience because the existing dealers are going to have increased sales which lead to better facilities, better customer service and more sales for GM....like people have said before.

Short Term pain for Long Term gain.

[XCR440SP]

I can't say nationwide, but I can speak for my area (as I belive it to be based on 2 known closures and other dealers having 2010 inventory).

They closed the Buick/GMC dealer to the South. They left the Chevy store. The Buick/GMC store was a normal dealership that most people liked. The Chevy store is hated due to poor customer service and repair practices. I hear constat complaints about them. The GMC store I did hear occasional complaint (but you will about ANY dealership), but nothing that said they were bad. The GMC store also had a Honda franchise that they "hobbied" with. The always had 5 GM products in stock for every Honda. Now they've loaded the lot with Hondas and I expect GM will loose more share in this market than just his as now they'll be conquesting the few customer the Chevy store had. This is the only import dealer in my area.

To the North there are 3 dealers. 1 claims to have survived, but has 1 new 2009 Silverado left in inventory and no other new cars (he was not on the Chevy closure list posted on this site). This dealer hasn't had any new GM inventory to speak of in over a year.

Another is dualed with Ford and Dodge. They used to sell lots of Chevys, but are now pushing Fords above the GM brands (easier to sell), but that's apparently OK to GM because they were spared.

The other dealer to the north kept a good selction of new GM inventory (for a small dealer) and was the one I'd have kept, but they're gone, aparently this isn't what GM wanted.

I firmly belive GM's choice of what dealers to keep will harm their market share more than just the number of closings.

It looks to me like GM did some thought and planing on the closure plan in the Medium/large markets, but in the rural areas it looks like they didnt' really car and just picked dealers without much planning or thought.

[jaymedstudent]

IMHO, this is going to be a lesson learned, for all involved, in the rule of "Unintended Consequences."

Absolutely destroying the future plans of many families, many of whom have owned a GM dealership for decades, is wrong. I am stating that as mildly and politely as I can.

Many lives were destroyed. This includes all of the service personnel, etc., who are now jobless in a small town, with no hope. Oh well, I hope the executives who made all of the bad decisions leading to this crisis can keep their millions.

I hope that I am wrong.

[mkwelbornjr]

We lost our Chevy and GMC/Buick/Pontiac dealers in a town of 25,000 people. GM has had a presence here since day 1. I find it odd that GM hasn't placed a new dealer here. We have the largest Toyota dealer in the state, Ford, Nissan, Chrysler, Mazda, and of all things Mitsubishi. GM handed the market to them.

However many dealers screwed themselves. Dirty shops and sales areas, guys smoking outside the doors with ashtrays full of cigarette butts. Adding crap to cars like pinstripes and tacky wheels to undermine any brand image. And charging $1500 for those stripes too. Any dealer that adds non factory stuff to cars should be closed down.

[KingElvis]

Originally Posted by jasaero

Wouldn't small and mid-sized generally rural areas also tend to be pretty Red areas of the country in the GOP vs Dem red and blue maps?? That couldn't have nothing to do with this! Not a chance!

Sorry for the sarcasm.

Jesus. Listen to yourself. Obama should have let GM die as all the right wingers wanted - then you'd be happy right?

[XP300]

The Chevy/Buick dealer a half mile from the house, closed about a month ago. This past weekend, the Ford dealer, who was located about a mile down the road, in a small and old facility, moved into the larger Chevy/Buick building. It's old but twice the size of the old Ford dealership.

The Ford Dealer made a smart move, as he now has twice as many cars on display in the lot where people can see them, including lots of the new Taurus. It looks like they are reconditioning the building too! Good for Ford and my city.

[ILLICEMAN]

Originally Posted by YupYupYup

Cole has an interesting link with dealers, though...Let you all figure it out.

It quite obvious that Mr Henderson is going to bring GM to its knees.The best thing he can do is retire now.
Any co. I have ever seen that just looked at taking the cream off the top was the loser.Dealers don,t just take the top deals.GM has caused alot of harm going forward that will never be replaced.Their arragonce here is unbelievable or is it.
They have taken many great car dealers down for a reason they themselves can,t explain.None of this was due proccess it was axe the dealers.

[jcgable]

Originally Posted by redwhiteandblue

Cole said he has no research expertise or experience with dealers.

Done.

[vcs2600]

Originally Posted by mkwelbornjr

We lost our Chevy and GMC/Buick/Pontiac dealers in a town of 25,000 people. GM has had a presence here since day 1. I find it odd that GM hasn't placed a new dealer here. We have the largest Toyota dealer in the state, Ford, Nissan, Chrysler, Mazda, and of all things Mitsubishi. GM handed the market to them.

Similar story here in San Francisco, where the local GM dealer folded and now they have a hole in their dealership coverage in an area with Ford, Toyota, Honda, etc.

The dealership shutdown plan was pushed through as part of the "quick bankruptcy". While GM was over-dealered in most locations, there's other areas where they are under-dealered. Now that they are back on their feet and have cut out most of the fat, hopefully they are looking hard at new locations.

[BlackGTP]

There was another thread in the past month discussing the dealer closings which had an average amount most of these dealers sold annually. It was a pretty low amount. In other words MOST of the dealers being closed will not give Ford, etc a beach head of any material nature. GM is closing most of these dealers because they sell a car a month.

[Extreme4x4]

Volume of sales, in small rural dealerships, will be low............... duh.

However, if the business is viable, who cares. Rural dealerships are the Domestics stronghold, and GM is giving much of that away.

Who will benefit the most?? Ford.

BTW, alot of small, added together, equals large.

In my area of 25K, it looks like our local Chevy dealership is going out. They were paired with Dodge/Jeep/Chrylser, but were a seperate building on the same lot. The next closest GM dealership is 90-100 miles away.

Do you think they lose their GM presence in my area?? You betcha. A customer would have to be loyal beyond belief, to travel that distance to buy and service. This is why foreign presence is so small in our area. The local Ford store, on the other hand, is laughing all the way to the bank (not really, as they are sad for the jobs lost, in a limited job market).

BTW, I would venture to guess that the Chevy store moved 20-50 vehicles a month. The vast majority being high margin trucks.

Stupid. Thats about all I can say.

[graycav56]

I wonder what long term impact recent developments will have on the future of the retail side of the house. Franchise agreements were enacted to protect the significant investments made by dealers against arbitrary closing by automakers. As with so much other legislation, they evolved over time to a point where the automakers had basically zero leverage to adjust their sales territories to match changing demographics and sales trends.

With no middle ground, many dealers wound up crushed by the bankruptcy courts with little or no warning. It looks like the smaller, family owned ones really took it on the chin. Who will take the chance on sinking a couple of mil into this volatile market?

As for spacing, I hope the remaining dealers know they will have to step up their loaner or ride programs. I have the wife normally pick me up at the local dealer when I drop off one of the vehicles for service. If I had to drive a significantly longer distance, well then I'd put the onus on the dealer, rather than me.