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ReprintsClosing dealerships an all-American problem
June 29, 2009 - 12:35 pm ET
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Our largest challenge has been the inventory sell down. As we have worked diligently to retail all our remaining inventory, we worked with other dealers to reassign some as well. That was harder than expected, and it made me truly realize the impact of what is going on in the franchised automotive world.
I came to understand this challenge even more as I took a mini-vacation over this past weekend. I had the opportunity to travel to Atlanta with my family to visit a few of my relatives as we took all of our children to Six Flags and Stone Mountain. Most of my several-hour drive to Atlanta was on the interstate. But coming into Atlanta, I began to see first-hand some of this national impact. You see, I've spent so much time at the dealership or in meetings with other dealers that I never really had the chance to venture out and truly see such an impact.
I passed dealerships, domestic and import, that I had seen over the years flourish in size, down to ghost lots with minimal inventory. Near our hotel in Atlanta was a two-story Lexus dealership that had the smallest amount of inventory I've ever seen, most of which was pre-owned. As we left Atlanta on Sunday, we decided to travel north up Georgia Highway 400 and then across to get back to South Carolina as we visited a few other places. During this drive, I passed towns that once had big automotive businesses, but some of those now had little inventory. Many stores had closed down.
And we're not talking extreme rural America, which is the picture painted by the manufacturers when they said they were closing points that were small, possibly with dilapidated buildings not fit for a franchise.
Instead, these were locations newer, modern buildings with huge lots, albeit with poor overall sales. They are all but gone.
How will the manufacturer recoup from losing these many "small," all-American points?
These are home town points that represent the franchise of the buyer's choice of vehicle. These are points that buyers can call not only for a great deal but also service after the sale.
And the dealer is also there for the local youth baseball team; the dealer always is proud to support the community.
Will customers travel to larger towns with bigger points?
Granted, we all must agree, as I did with my GM facility, that some markets just aren't strong enough to carry the load. But in many of the terminated markets there are many points that were viable -- in markets that had the faith and support of the community to prove those dealerships' viability.
Will those markets now be lost?
Sure, the customers will continue to purchase vehicles, but have we lost them to another brand?
Have we lost their trust and loyalty forever?
Only time will tell.
