Domestics cut down the number dealerships

One of the issues ailing domestic automakers is a bloated sales network, which sometimes includes pitting two dealers of the same brand against one another within the same market. Chrysler, Ford and General Motors have been trying to make inroads into this problem over the past year, and while these efforts are for the good of the company, the effects take their toll.

According to Automotive News, the Big 2.5 cut 462 dealerships between them in 2006. So far in 2007, GM has killed off 222 of its own dealerships, compared to this time last year. Much of this effort is the consolidation of franchises that only sold a few of the automaker's brands, to now include as many as they can handle (i.e. a GMC dealership now carries Pontiac, Buick, Cadillac, HUMMER, Saab, etc.)

GM isn't alone in their neighborhood downsizing, as both Chrysler and Ford have made significant cutbacks so far this year, with the former nixing 134 dealerships, while the latter cut 126, when compared to 2006 figures.

The upside to all of these cutbacks is more profits for fewer dealers, but at the same time, dealers that have been in the business for decades are being forced to sell their stores to local competitors. As expected, these retailers are leaving their livelihood feeling bitter and dejected.

Whether or not any of this will make a difference to the Big 2.5's bottom line remains to be seen, but it should be interesting to see how many total dealers were lost in 2007 and how many more will be killed off in 2008.

[Source: Automotive News (Sub. Req.)]

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