xcel
08-30-2006, 02:46 PM
GM's sales fell 14.1%, Ford's sank 9.8%, and Chrysler Group's dropped 10.4% compared with a year ago as more buyers opted for Asian and European brands. (http://www.usatoday.com/money/autos/2006-08-29-dealers-usat_x.htm)
Chris Woodyard - USA TODAY – August 29, 2006
http://www.cleanmpg.com/photos/data/501/Lincoln_Mercury_Dealership.jpg
Domstic based dealerships like this Lincoln /Mercury one may fail due to market forces.
Falling production levels by Detroit automakers could force many smaller dealerships around the country to close or consolidate.
"There will be fewer dealers," predicts Tom Addis, a Ford-Lincoln-Mercury dealer in Coeur d'Alene, Idaho, who is chairman of Ford's national dealer council. "We have the same size dealership (network) as when we had 25% of the market. Now we have 17%."
Rural dealers are likely to survive because they often have larger exclusive market areas. And cities are increasingly dominated by big-volume dealers, leaving smaller new-car sellers at greatest risk. How Detroit automakers are reacting:
Ford Motor: Ford told dealers last month at a new-model introduction show in Las Vegas that they need to reduce their numbers. "We're going to work with our dealers on a voluntary basis to try to improve sales per dealer, and that will involve some consolidation over time," says spokesman Jim Cain. No target for paring its 4,300 dealers has been set.
Chrysler Group: The number of dealers has already fallen by 300 and now stands at 3,800. Chrysler wants more cuts. "We are basically trying to optimize the number of dealers with the level of sales activity," says spokesman Kevin McCormick. "We don't go in and say, 'You stay open' and 'You close.' We just point out the obvious."
General Motors:. The largest automaker has realigned its brands to try to put Pontiac, GMC and Buick under a single dealer roof. It has seen some "natural bunching together" but isn't actively trying to get any of its 7,300 dealers to close, says spokesman Dee Allen. "We're working with their profitability, not their extinction."
Over the first seven months of the year, GM's sales fell 14.1%, Ford's sank 9.8%, and Chrysler Group's dropped 10.4% compared with a year ago as more buyers opted for Asian and European brands, Autodata figures show.
AutoNation, the nation's largest auto dealer chain, has shed 25 dealerships over the past two years even as it opens new ones elsewhere. Only six of the closed dealerships sold import brands.
"Domestics have not rationalized their retail network," says AutoNation CEO Mike Jackson, a consolidation advocate. As sales of domestic brands fall, weaker dealers have less sales volume, making it harder to afford buildings and staff.
The National Auto Dealers Association wants automakers to let dealers decide their own fate and recognize that more sales outlets help buyers. "Competition is good for consumers. The more dealers, the better," says spokesman David Hyatt.
Some dealers think attempts to cut are downright dumb.
"I know of no manufacturer in the world that would attempt to reduce its problems by reducing outlets," says Jack Fitzgerald, whose dealerships in Maryland and Florida include Chrysler and GM brands.
"Only Detroit would come up with that stupid conclusion."
Chris Woodyard - USA TODAY – August 29, 2006
http://www.cleanmpg.com/photos/data/501/Lincoln_Mercury_Dealership.jpg
Domstic based dealerships like this Lincoln /Mercury one may fail due to market forces.
Falling production levels by Detroit automakers could force many smaller dealerships around the country to close or consolidate.
"There will be fewer dealers," predicts Tom Addis, a Ford-Lincoln-Mercury dealer in Coeur d'Alene, Idaho, who is chairman of Ford's national dealer council. "We have the same size dealership (network) as when we had 25% of the market. Now we have 17%."
Rural dealers are likely to survive because they often have larger exclusive market areas. And cities are increasingly dominated by big-volume dealers, leaving smaller new-car sellers at greatest risk. How Detroit automakers are reacting:
Ford Motor: Ford told dealers last month at a new-model introduction show in Las Vegas that they need to reduce their numbers. "We're going to work with our dealers on a voluntary basis to try to improve sales per dealer, and that will involve some consolidation over time," says spokesman Jim Cain. No target for paring its 4,300 dealers has been set.
Chrysler Group: The number of dealers has already fallen by 300 and now stands at 3,800. Chrysler wants more cuts. "We are basically trying to optimize the number of dealers with the level of sales activity," says spokesman Kevin McCormick. "We don't go in and say, 'You stay open' and 'You close.' We just point out the obvious."
General Motors:. The largest automaker has realigned its brands to try to put Pontiac, GMC and Buick under a single dealer roof. It has seen some "natural bunching together" but isn't actively trying to get any of its 7,300 dealers to close, says spokesman Dee Allen. "We're working with their profitability, not their extinction."
Over the first seven months of the year, GM's sales fell 14.1%, Ford's sank 9.8%, and Chrysler Group's dropped 10.4% compared with a year ago as more buyers opted for Asian and European brands, Autodata figures show.
AutoNation, the nation's largest auto dealer chain, has shed 25 dealerships over the past two years even as it opens new ones elsewhere. Only six of the closed dealerships sold import brands.
"Domestics have not rationalized their retail network," says AutoNation CEO Mike Jackson, a consolidation advocate. As sales of domestic brands fall, weaker dealers have less sales volume, making it harder to afford buildings and staff.
The National Auto Dealers Association wants automakers to let dealers decide their own fate and recognize that more sales outlets help buyers. "Competition is good for consumers. The more dealers, the better," says spokesman David Hyatt.
Some dealers think attempts to cut are downright dumb.
"I know of no manufacturer in the world that would attempt to reduce its problems by reducing outlets," says Jack Fitzgerald, whose dealerships in Maryland and Florida include Chrysler and GM brands.
"Only Detroit would come up with that stupid conclusion."