The Homa Files

Ken’s Take: It’s no secret that Detroit automakers have too many dealers in their distribution networks.  It’s  function of legacy overbuilding, and rigid laws (usually state) that restrict de-franchising.  Perhaps the bad economy is solving the problem for them.

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Excerpted from Knowledge @ Emory, “Car Dealers Suffer as Sales Stall “, Feb. 12, 2009

Automobile dealers, many of which are family-owned businesses, were hammered by high energy prices and the tight credit market, and are one of the economic downturn’s latest casualties.

Based on falling sales, about 5,000 car dealers across the U.S., or nearly 25 percent of the estimated total, would have to close in 2009 to enable average sales per dealer to match 2007’s results, according to a study released in January by the accounting firm Grant Thornton LLP.

http://knowledge.emory.edu/article.cfm?articleid=1218# 

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This entry was posted on February 18, 2009 at 6:55 am and is filed under Autos - Travel, Mktg - Distribution. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.