GM "Expects" To End 2008 With 350 To 400 Fewer Dealers; Current Count Is 6,550

[zete]

With estimates of 20 - 33% of US dealers closing due to the financial crisis in the US, GM may well see 1200 - 2500 dealers disappear, all without GM having to buy anyone out. The remainder will be amenable to a new structure and should be better off with fewer competitors.

We've started seeing dealers folding already, I figure early in the new year we'll see hundreds close that are marginal if the economy doesn't pick up.

[nadepalma]

Originally Posted by zete

With estimates of 20 - 33% of US dealers closing due to the financial crisis in the US, GM may well see 1200 - 2500 dealers disappear, all without GM having to buy anyone out. The remainder will be amenable to a new structure and should be better off with fewer competitors.

We've started seeing dealers folding already, I figure early in the new year we'll see hundreds close that are marginal if the economy doesn't pick up.

Is that 20-33% ALL US dealers or just GM?

This is an interesting point. It will be interesting to see how it plays out.

[Buickman]

you poor confused souls with no idea of the impact of so many dealers starving and going under. once the strength of GM, these individual businesses are dying as Toyota and Honda literally take away the character of America. man, has Wagoner got you fooled. he has done it intentionally, while you were sound asleep, and meanwhile...convinced you that it was a good thing he did it. sad...

[vibecar]

Originally Posted by t-rex

But, GMCSonoma, "what if" your dealership ceased to be a new car outlet, but remained as a parts and service center? Or even keeping used cars?

I wish I knew more about the parts/service biz, because at least from an outsider's point of view, it would seem that GM's glut of dealers could be used as an asset, if those rural and small town dealers remained as service/parts centers.

Up here we have a perfect example. A city of 30,000, with many stores, restaurants, services and dealers serving the area. (We have a Honda, Toyota, Nissan, Volkswagen, Hyundai, Ford, Kia, Mitsubishi, Chrysler-Jeep-Dodge) Our city used to have 2 GM dealers: a Chevy-Olds-Cadillac dealer and a Pontiac-Buick GMC dealer.

Over the years the Chevy dealer expanded it's parts & service shop. Then it lost Oldsmobile. Finally in 2007, the two GM outlets merged. All brands are now sold at the former Pontiac dealer which was completely renovated and expanded. It's now a central, large, modern all-GM dealer.

The former Chevy outlet became the Used Car showroom and they kept the repair/parts service area there, leaving the sales alone in the new dealer.

[SierraGS]

Originally Posted by Buickman

you poor confused souls with no idea of the impact of so many dealers starving and going under. once the strength of GM, these individual businesses are dying as Toyota and Honda literally take away the character of America. man, has Wagoner got you fooled. he has done it intentionally, while you were sound asleep, and meanwhile...convinced you that it was a good thing he did it. sad...

What do you expect from a bunch of MBA's?

Smaller is better, less is more, blah, blah, blah.....

Few understand that the local dealer ultimately make or break any automaker and their revenue/profit ratio is better in service than new vehicle sales so the more dealers you have (if provided with great product) the better since the dealers are (or should be) focused on good relations to get customers back for service thus creating more new sales and so on.

Typical dealer revenue/profit ratios (2005 NADA AutoExec May 2006)

New Vehicle: 60.1% Revenue - 14.5% Profit
Used Vehicle 28.1% Revenue - 27% Profit
Service/Parts 11.7% Revenue - 58.6% PROFIT

GM needs to fix how it manages the dealers they have (or survive) and provide them with good product - the rest will take care of itself.

[BrickTamland]

There is something I wonder that further confuses things just like the asterisk does - Do those dealership counts include brands that are in different buildings that neighbor and market themselves together? Here, we have Ed Schmidt Chevrolet-Hummer, though the Chevys are sold in one building, and right behind them, in a discontiguous building, is the Hummer dealer. They market themselves together in all their TV, radio, and print ads and list the same address.

I'm also curious how many dealers are in combination with non-GM vehicles. We have Brown Pontiac-Hyundai, Ed Schmidt Volkswagen-Saab, and Ed Schmidt Pontiac-GMC-Jeep-Volvo.

[GMC-70]

Chalk up another dealer closure--Country Buick-Pontiac-GMC-Caddy on LI has announced it is closing its doors. This explains why they have basically no inventory for the last few months.

This was originally a stand alone Buick dealer up until about 15 years ago when it took Pontiac. GMC and Caddy were added later--apparently still not enough to keep the doors open.

The only GM dealer in the heavily populated Huntington area is now the long standing Chevrolet dealer.

Sad day