Dealership Closings

[War Eagle]

I have been following this subject since the hearings. Congress wants both GM and Ford to reduce the number of Dealerships but now that neither will be in Chapter 11 it may be dificult. Dealership closings could have an impact on orders and allotments for the new Camaro.

http://www.cnbc.com//id/28505172?__s...t%7C&par=yahoo

Steve

[Mr. Wyndham]

In their proposed plans, GM had provisions to eliminate some 1200 or so dealers by 2012. I'm confident they'll get it done...they can't afford not to.

I also thought their focus was merging smaller dealers into larger ones as opposed to outright closing them all?

[trm0002]

Originally Posted by Dragoneye

In their proposed plans, GM had provisions to eliminate some 1200 or so dealers by 2012. I'm confident they'll get it done...they can't afford not to.

I also thought their focus was merging smaller dealers into larger ones as opposed to outright closing them all?

If nothing else, closing a bunch of dealerships would inherently drive the price to the buyer UP towards MSRP. Dealers don't give us deals because they want to, they give us deals because of competition. Problem with the whole thing is it doesn't make GM any more money doing it. It makes the dealers more profitable but not GM.

[Sizzox]

Well what happens to the owners of the dealership they just get screwed or what cause my dad best friends owns a dealership and it is a very small dealership but does well and its where i ordered my camaro from. I would hate for that to happen to any one who own/runs/works for a dealership.

[trm0002]

Originally Posted by Sizzox

Well what happens to the owners of the dealership they just get screwed or what cause my dad best friends owns a dealership and it is a very small dealership but does well and its where i ordered my camaro from. I would hate for that to happen to any one who own/runs/works for a dealership.

They'd get a buyout similar to the Oldsmobile dealers I would assume.

[Rodrunner]

Originally Posted by trm0002

If nothing else, closing a bunch of dealerships would inherently drive the price to the buyer UP towards MSRP. Dealers don't give us deals because they want to, they give us deals because of competition. Problem with the whole thing is it doesn't make GM any more money doing it. It makes the dealers more profitable but not GM.

Since first reading this thread earlier, I've been wondering how the closings save GM money, and what does it do for the buyer if anything, because I couldn't see how it benefited either. So why the push to close them? We must be missing something.

[Mr. Wyndham]

Originally Posted by Rodrunner

Since first reading this thread earlier, I've been wondering how the closings save GM money, and what does it do for the buyer if anything, because I couldn't see how it benefited either. So why the push to close them? We must be missing something.

This is right from GM.

"As indicated, the number of GM retailers is expected to decline to 4,700 by 2012. This will occur primarily in metropolitan and suburban areas where GM has too many dealers to serve the market. In the Plan, it is projected these dealers will be reduced by 35%, increasing annual throughput for the remaining outlets to a more competitive level with other high-volume manufacturers. GM‘s distribution strength in rural areas, which is a significant competitive advantage, will be largely preserved. GM intends to have the right number of brands, sold by the right number of dealers, in the right locations to obtain maximum profitability for GM and the retailer network."

[josh1147]

Yes, usually the dealers get screwed and there isn't a whole lot they can do except grin and bear it....

The Oldsmobile buyout was a bunch of crap....my families dealership value went from something very valuable one day to "whatever GM thought it was worth" the next day.

If/when GM decides to 'right-size' their dealership network, I hope they put a little more thought into it this time.

[trm0002]

Originally Posted by Dragoneye

This is right from GM.

...sold by the right number of dealers, in the right locations to obtain maximum profitability for GM and the retailer network."

And doing so makes GM more profitable how? Obviously it should make the dealership more profitable without having to have price wars with other local dealers, but GM ? Unless of course, GM ups invoice pricing to dealers too since the dealers shouldn't have to discount them to us as much...

[Mr. Wyndham]

I haven't got a clue. All I can do is quote.

But I do know that one of the big deals in this issue was that Toyota sells almost the same amount of cars as GM with less dealers. And for some reason -- that was bad for GM. I don't understand the logistics of it, though. :(

[UCF w00t]

Yea... this is something I don't understand. How can making it harder for consumers and most likely more expensive consumers help GM? I guess they have a price per dealer when it comes to stuff like training, etc but it can't be that much... It's not like they're getting rid of the costs of maintaining an entire brand as it was with Olds. Maybe they should increase the invoice on cars while keeping MSRP where it is (or lower)?

[toesuf94]

Dear GM:

Here is a Hint: CLOSE / END all agreements with any dealers that are offering makes other than GM at thier shops. I.E. Anderson Cadillac Kia, Johny's Chevrolet Hummer Toyota Suzuki. Support the dealers who have been loyal to GM and get rid of these mega stores that usually have crappy service and compete DIRECTLY with your product.

Regards,

G.M. Supporter

[StuMac]

Originally Posted by Rodrunner

Since first reading this thread earlier, I've been wondering how the closings save GM money, and what does it do for the buyer if anything, because I couldn't see how it benefited either. So why the push to close them? We must be missing something.

The only thing I can think of is reducing transportation costs, but since the plan is to reduce the number in big cities, it just means the truck doesn't have to go across town to make all it's deliveries, so it won't help much. I think it's just Congress once again having no idea what it's talking about, thinking the over-saturation of dealerships that have paid to use GM's name somehow hurts GM itself.

[UCF w00t]

It really seems like they think that GM owns and operates the dealerships. That's the only way I can understand why this would save GM money and why they think it would be so easy just to close some of them.