Economy Takes a Toll on Auto Dealers Ranks
April 09, 2009
In the first quarter this year, 271 auto dealers in the U.S. went out of business, according to
the National Automobile Dealers Association.
NADA reports at the end of the first quarter, the U.S. had 19,738 auto dealers, down from 20,009 year-end 2008.
The trade group predicts about 1,200 dealers, mostly representing General Motors, Chrysler and Ford brands, to go out of business this year, about 20 percent more than last year.
Dealers have been socked by slow vehicle sales, soaring costs and tightened credit terms.
GM lost 198 dealers in the first quarter, for a total of 6,177, the Wall Street Journal reported. The automaker told the U.S. Treasury Department in its viability plan that it will reduce the number of dealers by 25 percent in four years to 4,100 dealers in 2014.
The imminent sale or elimination of Hummer will account for about 125 of those. Newly installed GM CEO Fritz Henderson said a decision on Hummer will be made in a matter of days or weeks, not months. This week reports surfaced that three bidders have made offers for the SUV brand.
GM also has said unless an alternative plan is found for Saturn, the brand will cease to exist around 2011 when its products reach the end of their life. Already a number of Saturn dealers have gone out of business as Saturn sales dropped more than 60 percent in the first quarter compared with a year ago.
Chrysler lost 82 dealers in the first quarter, dropping its total to 3,218, according to the Journal. Chrysler has told the government in its Feb. 17 viability that 27 percent of its dealers were in financial trouble.
Ford lost 269 dealers in 2008, for a total of 3,787, the Wall Street Journal reported. Numbers for the first quarter of this year were not available.
Posted by Michelle Krebs at 7:25 PM under Chrysler , Companies , Ford , GM , News | Comments (3) | digg this | Seed Newsvine
Isn't the real story if they are the "right" dealers? From 16.2M to 13.2M to 9.8M(?) units, the marketplace will dictate how many dealers are needed. THe OEM just want the right ones, right location, etc.
Posted by: tvmissionary | April 09, 2009 at 9:16 PM
Isn't the real story if they are the "right" dealers? From 16.2M to 13.2M to 9.8M(?) units, the marketplace will dictate how many dealers are needed. THe OEM just want the right ones, right location, etc.
Posted by: tvmissionary | April 09, 2009 at 9:16 PM
This isn't really a "poor economy" story. GM, Ford, etc have been actively pursuing elimination of dealers.. there were way too many even back in the hot market share days. If it weren't for state anti-trust laws, the big 3 could just slash the number of dealers down to profitable size. Anyone notice, when things are bad, there seems to be govt/politician involvement somewhere in the thick of it?!?
From your numbers, looks like Ford has made the best progress.
Posted by: jemilio | April 12, 2009 at 7:56 AM