Reply #9: having more dealers doesn't mean selling more cars [View All]

[lithiumbomb]

"Both Chrysler and GM have expressed interest to shrink their dealer base. Company officials cite various data points related to choosing these dealers, but the main one is performance.

GM said that the average dealer of the 1,100 affected only sold 35 cars in all of 2008. Chrysler cites similar numbers, with half their closing dealerships selling less than 100. But, even after these reductions by Chrysler and GM, they still have more dealers than other manufacturers.

Using April 2009's sales data as a proxy, Toyota has approximately 95 dealers per 1 point of market share in the U.S., while Chrysler has 256 and GM will have 172 (at the end of 2010). This means that, effectively, Toyota is able to sell more vehicles per dealership"

http://www.cnn.com/2009/LIVING/wayoflife/05/20/aa.dealer.closing.info/

Also, I believe, the more dealerships you have the more unsold cars have to remain in the total inventory waiting for buyers, and that just costs everybody money.