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Rant on
I don't quite see the logic in GM (or other US automakers) closing dealerships. Can anybody shed some light on this?
GM to Slash 1,100 Dealerships
"...About 400 to 500 of the GM dealers that are set for termination by the end of 2010 have been selling only about 35 vehicles per year, LaNeve said. And many were in "danger of going out of business anyway" because their profitability is so low.
The sheer size of GM's dealer network was hurting business. Rising competition forced dealers to undercut each other on prices, lowering the products' residual value and damaging the company's future sales..."
It seems to me that it's no skin off GM's butt as long as they weren't directly subsidizing them. Why don't they let dealerships die naturally if they can't cut it? Do they think the public will more likely buy higher priced "rare" Chevrolets? It's a bit like Kool-Aid shutting down lemonade stands to sell more Kool-Aid. Free enterprise isn't free anymore. Nor does it make sense. Again.
Perhaps their logic is to sell very few cars at premium prices. A few good cars... like a few good men. Logically, it reduces to... sell only one car for three times it's worth and corporate profit shoots through the ceiling, percentage-wise.
I can see GM wishing they could close competing-brand dealerships.
I don't have a problem with, sometimes amazing, GM engineering. For the money, the products are actually far better than given credit. Anybody can build a good car for 50K plus.
Rant off
Wes
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