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Automotive News & Views Dude, where did all the dealerships go?
654 messages, Last post on Nov 23, 2009 at 7:56 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Credit crisis is closing GM, Chrysler stores at a fast clip April 20, 2009 - 12:01 am ET DETROIT — The credit crisis and other financial problems are accelerating General Motors and Chrysler LLC dealership closings. This year GM has lost 165 dealerships, Mark LaNeve, GM North America vice president of vehicle sales, service and marketing, told Automotive News last week. "Normal attrition is about 175 to 200 for a full year, so we're at a much higher acceleration," he said. Steven Landry, Chrysler's executive vice president of sales and marketing, said 35 dealerships closed in March. In early 2008, about 20 dealerships were closing a month, the company said. "Dealership terminations have increased 35 percent in the last six months due to stress in the financial markets," Landry said in an interview this month at the New York auto show. .....Chrysler's Landry said many undercapitalized Chrysler dealers need help with retail loans, wholesale loans, loans for capital expenditures and real estate. "Some third-party financial institutions have said to some dealers, 'We're getting out of the floorplan business,' " Landry said. In some cases, the institutions are giving dealers 90 to 120 days to find another floorplan provider, he said. Normally, those dealers would approach Chrysler Financial for floorplanning, Landry said, but "Chrysler Financial says we don't have any money right now." ......While GM and Chrysler executives think they need smaller dealership networks, a brutal recession has made the consolidation chaotic and unpredictable. Dealers are running out of cash, and they are starting to panic. "I'm selling this place," one GM dealer who declined to be identified said last week. "I'm giving it away just to get out of it. I have to get rid of everything." The dealer has fewer than 100 total used and new cars on his lot, about half of normal. And he has just one technician in his service department. "My dad bought this dealership in the early '80s, and I washed cars for him," the dealer said. "He's had it for 30 years. This is my retirement, and it's gone." http://www.autonews.com/article/20090420/ANA06/304209972/1178 (registration link) And how many more will go if this pair DOES declare bankruptcy, as is looking increasingly likely? These dealers aren't far away in Detroit, these are businesses in our communities! 
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Bankruptcy fears rattle dealers Retailers get ready for GM and Chrysler filings April 20, 2009 - 12:01 am ET DETROIT — The growing likelihood that General Motors and Chrysler LLC will land in Bankruptcy Court has sent a wave of fear through U.S. auto dealers. Many GM and Chrysler dealers are protecting themselves by cutting inventory and factory orders. GM and Chrysler desperately need orders, but dealers are holding back because the automakers are in such bad shape. "We're SOL if GM goes BK," said Chevrolet dealer Larry Dimmitt. Dimmitt, who owns Dimmitt Chevrolet in Clearwater, Fla., ordered some GM vehicles in February because he wanted the cash incentives of up to $1,250 per vehicle. Now he regrets it. Dimmitt said he thought the market would open up but "it hasn't — it's gotten worse." He estimates his days' supply is five to six months at his current sales rate of about 15 a month. He has stopped ordering new vehicles from GM. As of April 13 Dimmitt had sold only seven new vehicles this month. He was hoping for 20 sales by midmonth. Early in this decade, he said, he would sell about 65 new vehicles by midmonth. If a manufacturer files for Chapter 11 protection from creditors, the value of inventory will plummet. With an automaker in Bankruptcy Court, floorplan lenders want their dealer customers to have minimal inventory to reduce their risk. Chrysler dealer Troy Allen, said, "I didn't order one vehicle for most of October, November, December, January." Then he participated in Chrysler's wholesale allocation program in March and April, meaning he got up to $1,000 a vehicle on most vehicles. He owns Allen Motors, a Chrysler-Dodge-Jeep dealership in Derry, N.H. In December, he hired a bankruptcy lawyer to prepare his dealership for a possible Chrysler bankruptcy http://www.autonews.com/apps/pbcs.dll/article?AID=/20090420/ANA06/304209968/1197- (registration link) It also mentions that because dealers have to wait to get reimbursed from the manufacturer for cash rebates, some are asking their customers to hold off on that now, until they get the money from GM or Chrysler, at which point they turn around and cut a check to the customer. No way would I rely on that. I feel really bad for these dealers, but on the flip side I have to say that even if GM or Chrysler were my #1 choice for a new car and I needed one right now, I wouldn't go near a GM or Chrysler dealer right now. I would be really afraid of getting burned in some aspect of the purchase. 
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| My local Lincoln-Mercury dealer has now apparently consolidated with the Ford dealer about a block away, I think they are using the same facilities now. The overhead must have been killer for such a low volume combination. | |
The morning I passed a used car dealer's lot I've been going by for the last 6 years. Yesterday at lunchtime, the lot was full of late model cars and trucks including an unusual F-150 diesel work truck. This morning, the lot is entirely devoid of vehicles! Now, car thieves aren't that ruthless and the lot's physical condition is good, so that rules out theft and property repairs.
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Replying to: lemko (Apr 24, 2009 6:06 am) Now that I think about it, I don't think I've seen too many of those types of ads on tv anymore, where they talk about no money, no credit, no problem! These day's it's more along the lines of "lose your job, and we'll make your payments for you/you can turn your car back in/etc".
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Did I snooze through the news or is Pontiac being discontinued Monday? 
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Replying to: euphonium (Apr 24, 2009 6:50 pm) "Edmunds.com's Inside Line, like AutoObserver a part of the Edmunds.com organization, reported yesterday that a source at GM indicated the company is likely to announce on Monday that it will fold Pontiac, a name that has been part of the GM empire since 1926." Edmunds: GM To Hit the Kill Switch on Pontiac
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speculation, by many of us, in the various GM threads, it comes down to Pontiac. Makes sense though. Really it was either Pontiac or Buick, and they found a real purpose for Buick after all. I felt weepier about Olds, frankly, but only because I owned a '65. RIP Pontiac. |
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Replying to: plan_man (Apr 25, 2009 5:55 am) that may not have been a bad decision from a marketing perspective.
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