You're right the dealerships are individually owned businesses but they are stuck in a no win situation with the manufacturers at this point. As the manufacturer is cancelling the contracts to sell their cars (and, very importantly, the financing system) GM is, effectively, closing the dealerships.I think I don't quite understand what the manufacturer really puts into a dealership besides the license to sell said cars. I was always under the assumption that the dealership was owned by a private entity and then signed a contract/license agreement to sell a certain manufacturers cars.
No, they have already stated they are not buying back cars or parts. They will instead help dealers try sell their stuff to other dealers. Neither GM or Chrysler will be buying anything back themselves. It would cost far too much.GM is famous for stacking dealerships on top of each other in the same nieghborhoods - forcing GM dealerships to compete against each other for the same customers and cutting thier own throats to make a sale.
Does anyone know if GM will be buying back the new car inventories that these dealers have on thier lots - all 1,100 of them?
When our local Chevy dealership closed two years ago (they saw the demise of GM coming) GM did a buy back all of the store's new car and truck inventory - about 200 vehicles.
200 x $20,000 (average invoice price) = $4,000,000
If GM doesn't buy back these inventories the effected dealerships will be in even more trouble.
The sad truth is they are not the only ones doing this.I've been saying for 15 years that GM and Chrysler had to stop flooding the market with different versions of the same car under different brands. It's a terrible way to do business, trading increased market share via overproduction for lower profits and higher costs. To stay afloat, they have to be producing at capacity in all plants. It's freakin nuts.
It's not such a big deal when doing it in this way, (basic, and luxury), but GM and Chrysler do it to the extreme, offering as many as 4 vehicles based on the same car, SUV, or truck. For Honda and Toyota, it's a way of reaching different markets.The sad truth is they are not the only ones doing this.
Honda Accord = Acura TSX/TL
Honda Pilot = Acura MDX
VW Passat = Audi A4
VW GTI = Audi A3 = Seat
Ford = Mercury
Nissan Maxima = Infiniti G35
Toyota Avalon = Lexus ES or GS
This is so common in the car/truck industry. It saves them a ton of money and fools so many people into thinking they are getting so much more for their money when in fact they aren't usually.
Haven't seen the Canadian list yet but the Globe & Mail is reporting that half the Canadian dealerships will be cut (about 350)
There are going to be a lot of mechanics, parts people, sales staff out of work over this. Anybody know anyone hurt by this?
That list is Chrysler dealers.Here's the list of Dealerships closing.
The are closing by June 9th.