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Automotive News & Views Dude, where did all the dealerships go?
657 messages, Last post on Dec 04, 2009 at 11:37 AM
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This could get ugly as GM closes dealerships. GM to cut 1,000 low-rated dealerships next year Jamie LaReau Automotive News April 27, 2009 - 4:29 pm ET DETROIT -- General Motors plans to contact owners of about 1,000 dealerships starting in May to notify them that their franchise agreement will not be renewed in 2010, a GM executive says. The 1,000 will be part of GM's plan to cut its roster to 3,605 dealerships by 2010, under new restructuring goals released today. GM finished 2008 with 6,246 dealerships. "There's approximately 1,000 dealers that basically are very poor performing and not adhering to the sales and service agreement," said GM's Mark LaNeve, vice president of vehicle sales, service and marketing, in an interview today. "Those dealers would receive a contact very early on in the process preferably in May that they will not be part of a reinvented GM going forward, and we'll work on a transition." The contact process excludes Hummer, Saab and Saturn dealers. Those brands are for sale. To determine which dealerships will be retained, LaNeve says GM is considering a dealership's sales, customer satisfaction scores, amount of working capital, facility standards rating and whether the dealership is dualed with an unapproved brand. GM's regional representatives are in Detroit this week to sift through that data, LaNeve says. GM might have to cut more dealers than it outlined today, LaNeve says. "A big variable might be what happens with Ford and Chrysler," he says. "The goal is a competitive dealer body." Here's how LaNeve sees dealer consolidation shaking out: • GM will lose hundreds of dealers in the next two years to normal attrition. GM has already lost 200 dealerships in the first quarter. It typically loses that amount in a whole year. • The sale of Hummer, Saturn and Saab will eliminate about 500 dealerships, LaNeve says. They will not be included in the 1,000 dealerships targeted in May. • GM will provide assistance to the 1,000 dealerships that will not be renewed, but LaNeve declined to be specific. • GM will work with the surviving dealerships to form consolidations that conform to the automaker's channel strategy of Cadillac, Buick-GMC and Chevrolet over the next 18 months, he said. In major markets, Chevrolet and Cadillac will be stand-alone channels, GM said in the new restructuring plan. Buick-GMC will stand alone or be aligned with Chevrolet or Cadillac with a "separate sales operation depending on market penetration and real estate costs," GM said. A GM spokesman said that in big markets there might be some superstores consisting of all four brands and that stores could be realigned to carry three brands. In mid-sized and small-town markets, GM said, "in many cases Chevrolet and Buick-GMC will be aligned with one dealer operator." GM will "dramatically lower" the number of Cadillac dealerships it has in small markets. LaNeve says GM hopes to have the plan in place for dealership consolidation by the end of 2010.
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Replying to: nippononly (Apr 27, 2009 7:12 am) They can set up a big garage behind the White house.  BO made another big promise like he was on the campaign trail. I would say the Indys will get the work. Just the owner will have to pay and try to collect from Uncle Sam. 
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Replying to: dtownfb (Apr 27, 2009 5:53 pm) That might kill Cadillac. People that buy that type car do not like driving 200 miles to a dealership for service. |
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Replying to: plan_man (Apr 27, 2009 4:04 pm) I was sad to see Plymouth go, mainly for the heritage, but by that time it was really a mercy killing. Chrysler had been starving Plymouth of decent products for decades by that time. By the time they pulled the plug, Plymouth was down to the Neon, Prowler, and Voyager. When the "cloud cars" got I think the main problem with killing Plymouth though, was that suddenly Chrysler moved downscale. The 2001 Sebring sedan seemed cheapened, compared to the 1995-2000 models. And the PT Cruiser really should have been a Plymouth...indeed was conceived as a Plymouth! For 2002, Dodge cheapened the base Intrepid, jettisoning such niceties as a tinted windshield, rear sway bar, pop-out cupholder in the console, carpeting on the lower doors, and replacing the cloth on the upper doors with vinyl. I don't know if Chrysler did a similar move with the base Concorde that year or not. When the RWD 300 came out as a 2005 model, IMO the cheaper models, especially the 2.7, had no business being a Chrysler. Those should have been badged as Plymouths, and perhaps make the Chryslers V-8 only. For a lot of Mopar enthusiasts, I think Plymouth really "died" in 1989, when the last RWD V-8 Gran Fury rolled off the assembly line. It was mainly a taxi/police car by that time, but it still had a lot of heritage in it. A name that dated to 1956, and an engine/tranny combination that came to symbolize rugged durability for decades (although my '89 Gran Fury copcar chewed up one of the camshaft lobes at 73K miles  ) When the Gran Fury went away, there was no replacement, and I think right then and there, a lot of people knew that Plymouth wasn't long for this world. Dodge got the Dynasty and Chrysler held onto the New Yorker nameplate, and had some reasonable success with them for a few years. Once Plymouth went away, I wonder if Chrysler dealers suffered much from losing the Neon? IIRC, many Chrysler dealers started adding Jeep, but I would think that the Neon would have brought in a bunch of entry-level buyers that could have then been swayed into something more expensive and profitable? |
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Replying to: dtownfb (Apr 27, 2009 5:53 pm) 1000 cut + 500 in the Saturn/Hummer/Saab network = 1500. They need to cut 2600. Do they expect the other 1100 to come from attrition? That's a lot of attrition just among GM dealers. In a normal year 1100 is more than the total dealer attrition rate industrywide.
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Replying to: nippononly (Apr 28, 2009 6:52 am) It was my understanding that close to 200 GM dealers have closed already in 2009, which is the amount of dealers that close for an entire year. If the trend continues, this means that 800 or so GM dealers will be gone by the end of the year. I know there are close to 400 Saturn dealers in the US - they're all gone (or will start selling products from other manufacturers) now that GM has stated that product will stop being built for Saturn after 2009. Are there standalone Hummer and Saab dealers? |
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Replying to: nippononly (Apr 28, 2009 6:52 am) |
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Replying to: michaell (Apr 28, 2009 8:16 am) Geez, you would have had to give me some stellar terms to make me invest in a Hummer stand. That always had "one-trick pony" stamped on it, even at its peak. I will shed zero tears for Hummer. Seemed emblematic of most of what was going rancid in America to me. SAAB is another story, IMO. I just see GM as a diservice there from almost the get go. When did they first offer a Gm V6 in one? Was that '88 or so? Oy. It's not like I was ever in the market for one, but I very much respected what they meant to their niche. Just for the record, the mufflers were still located in the glove compartments, weren't they? 
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Replying to: plan_man (Apr 28, 2009 1:07 pm) Guess that would depend on the definition of "stand-alone". Here in Denver, there are two Hummer dealerships, both owned by the same person. One is in the NW suburbs, the other is in the town I live in, about 30 miles south of Denver. Both are part of larger GM dealerships, though the Hummer store here in my town has a separate building that was put up just a few years ago. Can't imagine how much they're going to lose once Hummer goes away. Same with the Saturn dealers.
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Replying to: michaell (Apr 28, 2009 1:13 pm)
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