Industry's stable store count masks changes at brands
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Chrysler Group added domestic dealerships and franchises in 2012 for the second year in a row, but General Motors and Ford Motor Co. continued to trim their dealership counts.
The changes in the Detroit 3's dealership networks were relatively minor. But they reflect the automakers' differing approaches to adjusting the size of their networks, especially since the wholesale scything of dealerships as part of the 2009 bankruptcies of Chrysler and GM.
Overall, the number of new-vehicle dealerships and franchises remained stable last year, according to annual dealership census data compiled by Automotive News.
The number of light-vehicle dealerships in the United States on Jan. 1 dipped 1 percent from the year-earlier level to 17,760. The number of franchises was virtually flat: 31,376 on Jan. 1, down 69 from 31,445 a year earlier.
The stable totals obscure shifts among brands, most notably the elimination of Saab, Suzuki and Maybach. The exit of those three brands from the United States eliminated 465 franchises.
A franchise is an agreement that gives a dealer the right to sell a particular brand of new vehicles. A dealership is the building in which one or more of those vehicle brands are sold.
John Frith, a vice president at Urban Science, a retail consulting firm in Detroit, said a 2 percent annual decline of dealerships used to be considered normal. But that former steady attrition gave way to deep cuts in dealerships and franchises tied to the recession, the bankruptcies of GM and Chrysler and the elimination of volume brands such as Saturn, Mercury and Pontiac.
Now, barring unexpected economic shifts, industrywide growth in dealerships of 0.1 to 0.2 percent is expected over the next few years, Frith said.
And if new-vehicle sales stabilize at around 15 million units, he said, "we expect the overall dealership count to remain relatively flat."
Chrysler continued to refine its Genesis consolidation plan, launched in early 2008, which called for combining its domestic brands -- Chrysler, Dodge, Jeep and now Ram -- in each store by the end of 2011.
By now, a Chrysler spokesman says, 91 percent of the automaker's dealerships "have all four brands under one roof."
Its dealership count grew 2 percent to 2,370, and its franchise count grew 3 percent to 9,074 last year.
Chrysler's increases exclude its sibling Italian brand, Fiat, which added 62 franchises last year, an increase of 45 percent. Fiat had 200 outlets on Jan. 1, up from 138 a year earlier.
GM took a different stance last year, trimming its dealership count by 1 percent to 4,355. But its franchise tally rose 2 percent to 7,871, as a result of adding GMC franchises.
The company upped the franchise count of its truck-only brand by 174, or 11 percent, to 1,764. GMC's franchise gains were the largest in absolute and percentage terms among all mainstream brands. GM offset some of those gains by trimming franchises of its other three brands.
Both Ford's dealership total of 3,286 and its franchise total of 4,067 were down 2 percent. The Lincoln brand, which Ford has vowed to revitalize, led the drop. Five percent of its franchises disappeared last year. The Ford brand shed only 1 percent of its franchise total.
After years of rapid expansion in the United States, Korean siblings Hyundai and Kia cooled last year. Together they added just 14 franchises in 2012, after adding 52 in 2010 and 40 in 2011.
You can reach Arlena Sawyers at asawyers@crain.com.
