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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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About 2,000 U.S. new-vehicle dealerships — nearly one of every 10 — will close in 2008 and 2009, the National Automobile Dealers Association projects. And that's the best-case scenario, under which no automaker files for bankruptcy or dies next year. A bankruptcy would accelerate dealership shutdowns. The Detroit 3 are trying to consolidate and shrink their dealer networks. But many of the closings so far do not involve the metro-area stores the automakers want to eliminate. Peter Welch, president of the California Motor Car Dealers Association, offers even a more dire forecast than NADA. He said California lost 116 dealerships in the first 11 months of 2008 and has just over 1,500 new-vehicle dealerships left. He believes closures will total 150 by year end and predicts as many as 500 closings in 2009. ......For much of 2008, Detroit 3 dealerships accounted for about two-thirds of store closures, NADA chief economist Paul Taylor says. That share will rise to more than 80 percent next year, Taylor predicts. ......Next year, Taylor predicts 1,100 dealerships will close and 200 will open, for a net loss of 900. "The new dealership openings will be largely offshore brands, including Mahindra and Mahindra of India," he said. ..........Joe Pfeffer's Chrysler dealership has operated in Belleville, N.J., an urban area next to Newark, for nearly 67 years. In October, Pfeffer had to close the dealership and give up the franchise. His bank stopped financing all auto dealer inventory several months ago. Pfeffer contacted other lenders to finance the store's vehicle inventory, but none was willing to take on another domestic dealer account, he said. Two years ago he was selling 50 new vehicles and 15 to 20 used vehicles per month. In September, his last month in business, Pfeffer sold seven new vehicles and about five used. Apparently, in the recession of 1980 there was a net loss of 1550 dealerships out of 28,000. Even if the Treasury secretary hands the domestics a bunch of money now it will not stop the inevitable continuing sales slide and the loss of more of these dealers. And unlike what I thought MIGHT be the case, it is no "blessing in disguise" for the domestics because the WRONG dealers are closing. What an odd thing it is that there are RIGHT and WRONG dealers to be going out of business for Ford GM and Chrysler. http://www.autonews.com/article/20081215/ANA06/812150361/1203 (registration link) |
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| It is also service and parts at those dealers suffering. Many of the independents that I talk to seem to be feeling pretty good as people seem more willing to spend the money to keep their old cars running. But at the same time people aren't servicing their new cars as much as they used to. Maybe they just aren't using the dealers to service the cars I don't know. But I have a few friends who are in the business of servicing corporate fleets and as budgets are decreased so is the call for preemptive servicing. It is more than cars it is also work trucks and equipment. Two of the larger equipment companies that service forklifts and other equipment for the School district in the Inland Empire may be going out of business. If not they at least are cutting back staff to the bone. This may end up being a good thing as it might teach people that they don't need a new car every three years and the imports will have to start making parts for cars past the ten or fifteen year mark. However this could also be a boon to the after market industry. | |
I have often wondered whether there are more cars owned and driven or parked on new and used car lots. Frankly, I would rather buy a house than an automobile from GM. Untrained salespeople, overpriced repairs, warranty resistant service departments. Who needs it?
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Replying to: carlsasc (Dec 17, 2008 11:53 am)
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Replying to: boaz47 (Dec 17, 2008 1:11 pm) My wife and I were sitting in a traffic jam on our bi-weekly trip to Costco. It dawned on us just how impractical the suburbs really are. You are spread out too far to not have a car yet you are in constant traffic and the home next to you is within earshot of their stereo. If we were to ever abandon the country life it would probably be in a high rise where we would not need a car except for trips when we could rent. The real problem is most city digs are a lot more expensive than the burbs or country living. So far I have not seen any dealerships closed up. We don't get out to the big auto malls very often so they may be closing some.
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Replying to: gagrice (Dec 17, 2008 1:31 pm)
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Replying to: boaz47 (Dec 17, 2008 2:08 pm) El Cajon Ford has to be close to folding. They laid off 8 mechanics. One is a friend that had been there 17 years. We looked at homes up your way around Murrieta. Thought about Idyllwild then figured it was too far out. I don't see the bailout doing the dealerships any good at all. Or the people that have lost their jobs working at the dealers.
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Replying to: gagrice (Dec 17, 2008 4:04 pm) I think you are right. Like I said it isn't likely to save many jobs at dealerships or service departments. I used to be in transportation and distribution and had a fleet of 12 trucks and three five forklifts. I happened to visit with one of the men I contracted with to do our forklift servicing and he said companies are not servicing their equipment because of decreased budgets. He expects to get laid off any day now. I guess it is pretty much the same all over San Bernardino county. I was talking to my wife today about what we might do if the 4 banger ever fails smog and we agree we keep the Tahoe and get a EV for around town. I have been researching GEMs on line and I can get a used one pretty reasonably. If we have to go more than 40 miles in a day we can take the SUV. It is way more comfortable on the freeway anyway. At this point the Pontiac is sitting in the driveway where I would park the EV and it still runs well so I have to reason to ditch it.
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Replying to: boaz47 (Dec 17, 2008 6:39 pm)
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Replying to: gagrice (Dec 17, 2008 9:52 pm) |
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