AUTOMOTIVE INSIGHT: Detroit Three to Lose Thousands of Dealers

November 6th, 2008 at 12:43pm

As heard on
WWJ Newsradio 950

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The Detroit 3 automakers have been losing several hundred dealers a year, but here’s one retail expert who says now they’re going to lose thousands.

For years, experts have been predicting that there would be a big shakeout in the retail side of the automotive business. And now it looks like that day is here. Mike Jackson, the CEO of AutoNation, the largest dealer group on the country says the Big Three are going to lose thousands of dealers by the end of next year.

But Jackson actually sees this as a good thing. With fewer Big Three dealers selling cars, the surviving dealers will have more sales which will make them more profitable.

Jackson says up to now the Big 3 dealers have actually had to charge more for cars to cover their fixed costs because they sell fewer cars. He says now its time for the Big 3 to copy how the Japanese and Europeans do it: that is, with fewer dealers.

4 Comments to “AUTOMOTIVE INSIGHT: Detroit Three to Lose Thousands of Dealers”

  1. Wayne Owen Says:

    I feel the Automakers have done themselves in! If they had cut production on some of their different models, they could have saved millions of dollars! Why do they nedd to produce so many different models? Especially GM and FORD!
    These Automotive dealers should have been smart enough to have seen this coming. The importd don’t make near as many different models, as the Detroit three do.


  2. Ed Jenkins Says:

    I believe it’s been said that those who forget history are doomed to repeat it. Well that day is here. Let me first say that I love GM especially Chevrolet from which I started my career 25 years ago as a tech. Three years ago I left Chevrolet to become a service manager with Honda. I could see the writing on the wall. All trends come to an end and it was obvious to me that the truck trend would come to an end. GM was building cars but nobody wanted them. I’m not saying that Honda vehicles are better because I’ve seen both sides. But the Japanese automakers are looking 10 years down the road instead of 10 months down the road as their domestic counterparts. All to show a profit for the next quarter without investing in their future. It truely saddens me to see the big three go down. And don’t forget the union’s particaption in this. These union workers were making $28.00 per hour in the nineties with unlimited benefits while the average tech was struggling to make $18.00 on flat rate at their local dealer. I thought I would retire with a GM store but I can’t make a living at one and soon there may be none. Hat’s off to Wall Street, union’s, and greedy CEO’s. You have succeeded in taking down one of our nations oldest manufactured products!

  3. John Says:

    John McElroy,

    Short sighted selfish morons that think it is just the Big Three that created the current situation that the U.S. automakers and dealers are now in need to read:

    AUTOLINE ON AUTOBLOG: What if GM Collapses?
    November 8th, 2008 at 9:37am

    When Honda was making scooters the Big Three were building real cars in the U.S. with UNION LABOR. That is just how it was. Now the Big Three are at a global disadvantage due to the legacy Labor Contracts.

    Does that make Honda and Toyota better just because they build cars in the U.S. without Unions ?

    Ford and GM have the same quality as Honda and Toyota.

    Give Detroit until 2010 when the Union costs go down and see who does better then.

    Or, is the idea to kill what is left of the U.S. manufacturing base before then?

    These SELFISH SHORT SIGHTED S.O.B.s need to look past their navel with their stupid “it’s all about me” attitude.

    National Defense is a key part of Detroit.

    But, these morons that want the Big Three to die don’t think we will ever need national defense.

    They have B. H. Obama to save them.

  4. Matt Says:

    John (not McElroy),
    I’m not sure I understand your point about national defense and the recent election.

    You seem to be saying that those who elected Obama are the ones who want to kill Detroit, but didn’t Obama make it a part of his platform to save Detroit and keep and manufacturing base in this country?