LaNeve: GM likely to speed consolidation of its dealerships

General Motors cut three times as many dealerships in 2007 as in 2006, and a top executive said the automaker probably will speed its consolidation efforts.

GM trimmed its U.S. dealership count by 260 stores in 2007, finishing the year with 6,776 dealerships. That compares with a reduction of 87 stores and a year-end dealership count of 7,036 for 2006.

The automaker saw 23 more stores close in January, leaving it with 6,753 dealerships coming into the NADA convention.

The accelerated pace of closings in 2007 largely reflected progress GM made on its plan to consolidate Buick, Pontiac and GMC stores under one roof, said Mark LaNeve, GM's vice president of vehicle sales, service and marketing in North America. He spoke at the J.D. Power Automotive Roundtable here yesterday.

"Do we have a lot of work ahead of us? Yeah," LaNeve said. "Do we need to accelerate our efforts? Maybe. We probably will do that."

LaNeve said he has no specific annual reduction in mind. But GM must maintain "our intensity on doing that." Continued consolidation is important, especially when industry volume is declining, he said.

"That puts pressure on the individual dealer," he said.

Reducing the dealership count and increasing per-store sales will help the business case for surviving stores.

The pattern of dealership reductions will vary, LaNeve said.

"We have markets today where we have the exact right number of dealers," he said. "We have other markets where we probably need some very significant consolidations."

The company has reduced its dealership count significantly in the past decade. A spokeswoman said that GM's existing eight brands, plus Oldsmobile, had 8,884 stores at the end of 1996.

You can reach Amy Wilson at awilson@crain.com.


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ENLARGE
GM's Mark LaNeve: "Do we need to accelerate our efforts? Maybe. We probably will do that."
Photo credit: JOE WILSSENS


 

 

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