- Feb 5, 2007
Out of whack: Domestic dealerships outnumber Asians by 5 to 1 margin
The amount of automotive dealerships in the United states is staggering. Domestic dealerships alone number over 15,000 in the US. For perspective, there are less than 13,000 McDonald's restaurants in the US. At the current rate, the Detroit three's dealerships are shrinking at a three- to four-percent rate, much slower than share declines that are crippling the domestic automakers.
The sales number gaps between the domestics and Asians is equally astonishing. Your average Dodge dealer sells only 375 vehicles per
month year. In stark contrast, your average Toyota dealership hits nearly 1700 sales in the same time period. Steven Girsky, an industry analyst and former GM adviser, placed the desired amount of downsizing at two-thirds of the entire domestic dealer-body.
While most domestic auto dealers will tell you that there are too many dealerships out there, they are understandably inclined to think the other guy should shut down instead of them. Others are looking for corporate buyouts from the Big Three, but Ford, GM, and Chrysler just can't afford to foot the bill for a combined 10,000 closures, many of which would cost well over $1 Million dollars. Ford and Chrysler are actively trying to buy out dealers, but GM is saving its money for more new product. The targeted dealer buyouts from Ford and Chrysler will likely be far fewer than what is needed. Overall, this means little to you the customer. If you're in the mood for a new car and don't want to spend all day waiting to be assisted, it may be a good idea to hit your neighborhood Dodge dealer. You can walk in the door and have no trouble finding a salesman that's willing to deal to get a sale.
[Source: Detroit News]