Autoblog

Yesterday we wrote about GM's intent to shrink its 14,118-strong dealer network, with one idea to combine Pontiac, Buick, and GMC dealers into larger, more modern flagship outlets. Turns out that was only part of the plan: according to Automotive News, "General Motors is preparing to make public a plan to encourage the creation of superstores in major metro areas that would carry every GM brand."

These superstores, which would be called GM Collections, are being evaluated for major metropolitan markets where the real estate itself is more valuable than the dealer franchise. For dealers interested in such an outlet, GM's idea is to move service and parts centers off-site to make room for all of the brands. Some dealers think that's a turn-off for consumers, others report good results. In LA, this has been standard practice for a while, with some service departments 25 minutes away from their dealerships. We don't find anything wrong with it, either -- after all, once you've bought the car, how often do you need to go back to the showroom?

The superstores plan is another part of the consolidation plan. In addition to combining Pontiac, Buick, and GMC, the General is also thinking about merging Cadillac, Hummer, and Saab dealerships, which would leave only Chevrolet and Saturn as standalone entities.

UPDATE: Mark LaNeve sent an email to GM dealers this morning saying that the article in "Automotive News concerning a major push to put all of GM brands under one roof is out of context and a mischaracterization." There are no plans to make an announcement about new metro superstores at the NADA conference next month in San Francisco. However, Automotive News still maintains that GM will allow certain stores to carry all of GM's eight brands. We've included the full text of LaNeve's email after the jump (thanks Rob!) and you can check out Automotive News' updated article here (sub. req.).

[Source: Automotive News - Sub Req.]

At the end of World War II, GM "put a dealership in every little hamlet" to keep up with the postwar boom. Sixty years later, in 2005, long after that boom had ended and every domestic maker was losing market share, GM had 15,094 dealerships. By 2007 GM had reduced that to 14,118 dealers. But if GM plans to compete financially with its overseas competition, it will need to shrink that number a great deal further.

Chevrolet has 4,000 dealerships. Toyota, to sell the same amount of cars, has just 1,244 dealers. Put another way, the typical Toyota dealer moves 1,766 cars per year. The typical Chevrolet dealer moves 554. And the other domestics fare about the same: the usual Ford dealership rolls 556 vehicles off the lot every year, while a Dodge dealer does 374 per year.

GM is looking at consolidating Pontiac, Buick, and GMC shops into one. However, state franchise laws don't make closing dealerships easy, and it's hard to tell a profitable dealer that he needs to close for the good of the parent company. Dale Willey, head of the National Automobile Dealers Association, said "Dealers make the decision to get into the business, and the manufacturers accepted the dealers getting into the business. It ought to be the dealers' decision to get out of the business." While GM CEO Rick Wagoner realizes that the "payoff is significant" for reducing the number of outlets, he must know that the price will be significant as well.

[Source: Detroit News]