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Location: New Albany, Indiana (Greater Louisville)
11,974 posts, read 25,344,398 times
Reputation: 12186
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Tire Business - Log In (http://www.tirebusiness.com/subscriber/headlines2.phtml?cat=1204552929&headline=GM+seeks+ to+reinstate+661+rejected+dealerships&id=126805523 7 - broken link)
I think this shows how little Government Motors has learned from its recent bankruptcy. Foreign brands (and now domestic nameplate Ford) sell more cars from fewer dealerships to increase profit margins. The closing of 1,200 dealerships was made to make GM profitable again. If they weren't being directly subsidized by the Feds GM could not keep these non needed dealerships open
The dealership issue is an extremely complex one and decisions can't be universally made about how many dealers you need without careful consideration. You need to remember that dealerships are franchises.
GM did a great job restructuring their dealer base and merging brands to create a better dealer experience in larger markets. Where the issue tended to lie was in smaller local dealerships, generally in the midwest and south. They closed many smaller dealerships that were viewed as being too small on paper, only to find that the next GM alternative for the customers in that area was over 75 miles away.
If the franchise could exist comfortably in the market, why did it need to be closed? While you certainly don't need 5 GM dealers in Litchfield, IL 1 certainly has a place in the market. There are many communities that are only serviced by GM or Ford dealers. The rush to close dealerships was a little premature and now that it has been thought through it is nice to see them reconsidering some of those decisions.
Location: New Albany, Indiana (Greater Louisville)
11,974 posts, read 25,344,398 times
Reputation: 12186
If GM was a profitable business that wasn't owned by my government I could care less if they opened up 1,000 more dealerships and had their salespeople wear pink speedos. It just bothers me that a way to get them back to profitability has been backhanded.
Dealerships are not "opened" by GM. They are opened by people who apply for the franchise rights to sell GM brand vehicles and products. GM had significant saturation in some markets and certainly needed to consolidate the dealer base. The profitability and success of a dealer is not governed or guaranteed by GM.
The idea behind closing dealerships is about increasing profits for the remaining dealers and cutting down on in-stock inventory. The issue was that the cuts were done with an axe, not a scalpel. In most cases the smaller dealers that are being restored represent no burden on GM and if anything help broaden the market base.
This shouldn't be viewed as a sign of GM throwing money away.
If GM was a profitable business that wasn't owned by my government I could care less if they opened up 1,000 more dealerships and had their salespeople wear pink speedos. It just bothers me that a way to get them back to profitability has been backhanded.
No offense, but you're not the only one giving GM money. Please enlighten me exactly on what you're going to do about this situation besides complain.
I'm sorry, but every other thread in this forum is about GM. Don't buy GM if you don't agree with their actions. I for one will still proudly buy GM .
Tire Business - Log In (http://www.tirebusiness.com/subscriber/headlines2.phtml?cat=1204552929&headline=GM+seeks+ to+reinstate+661+rejected+dealerships&id=126805523 7 - broken link)
I think this shows how little Government Motors has learned from its recent bankruptcy. Foreign brands (and now domestic nameplate Ford) sell more cars from fewer dealerships to increase profit margins. The closing of 1,200 dealerships was made to make GM profitable again. If they weren't being directly subsidized by the Feds GM could not keep these non needed dealerships open
Well Foreign makes and Ford outselling GM is a recent thing, it's not like it's been like that for 20 years. GM was the largest automaker in the world for a very long time until recently. They may take their title back within a few years, who knows.
I do believe some dealerships should be closed seeing that GM axed a few brands but mergers would make more sense. GMC-Buick-Cadillac should all be at one dealership if you ask me. Chevrolet is the best selling brand so they should be on there own.
We have a Chevrolet dealer here that sells Mazda (a Ford owned brand) at the same location. Very odd.
*** I forgot, Ford sold it's controlling interest in Mazda. oops
One does have to wander where the governament politics came in on this matter since they presented such a firm case for it before.Why did they really change their minds;politics or because its better for the company?
I think they should have found 5 more dealers to spare - nice round number 666...
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