I do not claim to be an expert in the car industry but I have to ask how closing the places you sell your cars is good for business? My understanding is that dealerships are franchises that agree to carry the cars of the manufacturer whose logo they put on their buildings.
Dealerships have to meet criteria set by the car company by proving their ability to finance the purchase of inventories large enough to fulfill the local market needs for the cars they carry. They must be exclusive buildings for each brand. They must carry original parts with certified mechanics. They must be able to sell cars ethically.
What the car company gets from the dealer in return is the integrity of their brand and they don’t have to make the large investment it would take to have so many locations to manage around the country. They get the expertise of local business people that are closely connected to the community. They get a motivated workforce that is determined to sell cars for survival. They get data from the dealers on how to improve their products. It sounds like the car companies get the better deal in this relationship. So what benefit does Chrysler or GM or Ford get out of closing dealerships? Savings on some marketing costs? Accounting staff reductions to keep track of dealers? Someone help me out here.
The costs are mostly incurred by the dealers. They are highly motivated to sell their cars and take all of the risks in maintaining a healthy business. In a tough economy dealers adjust their cost structure based on demand to maintain profitability. How is that working for the big 3 car companies?
Reducing dealers is something that is best left to the free market not government bureaucrats acting like they know anything about the car business. I think the car companies need to adjust their union contracts, find new management that has the guts to go through bankruptcy to become healthy again, and throw the government bums out!
If not we will soon be getting the cars no one REALLY wants to buy; the “smart” car! Puke…