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  1. #1 Fewer but bigger dealerships expected to boost car prices 
    Fewer but bigger dealerships expected to boost car prices

    By Megan Woolhouse and Erin Ailworth
    Globe Staff / June 8, 2009

    The shakeout in the US auto industry will mean fewer but larger dealerships - decreasing competition among dealers and pushing up consumer prices on some cars by several thousand dollars, according to auto companies and analysts.

    Chrysler LLC and General Motors Corp., which have filed for bankruptcy protection, are expected to adopt a model similar to their Japanese counterparts - offering fewer brands and marketing them through fewer dealerships. Toyota, which surpassed GM as the world's largest automaker, has about one-fifth the number of US dealerships as GM, but sells almost three times as many cars at each location, according to industry publication Ward's Dealer Business.

    Such streamlining - Chrysler's trimming of dealerships is expected to begin tomorrow - will create more profitable businesses, say dealers and analysts, because surviving dealers will be able to sell a higher volume of cars per location. What's more, fewer brands will allow dealers to focus on improving customer service.

    "We're in an evolving business where the strong survive and the weak go away," said Sean McCarthy, sales manager at a Mastria GM dealership in Raynham, which expects to outlast industry turmoil.

    But what is good for dealers may be bad for consumers.

    Remaining dealerships will be able to charge more for cars, analysts say, because fewer dealerships make it harder for buyers to spark bidding wars. And as auto companies scale back factory production, heavy discounts and dealer incentives will dry up.

    Tom Wilkinson, a GM spokesman, said once the "current glut" of car brands disappears, prices for GM cars will increase anywhere from $2,000 to $6,000 for a new vehicle.

    Chrysler expects to see a price increase on new cars in the range of $1,000 to $2,000 over the next year or two, said Kathy Graham, a company spokeswoman. She cautioned, however, that prices are ultimately "market-driven."
    Peachy.

    Boston
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  2. #2  
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    Already overpriced vehicles are going to get even more expensive. They wonder why cars are floundering? Maybe because finally realized that having a $700 a month car payment plus the insurance costs is just stupid. I will continue to buy used vehicles and busting my knuckles keeping them running. Good thing working on my cars is a hobby I greatly enjoy.
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    CU's Tallest Midget! PoliCon's Avatar
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    And lets not forget that dealerships owned by people who either opposed or did not support Barry are being targeted for closure.
    Stand up for what is right, even if you have to stand alone.
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    Quote Originally Posted by PoliCon View Post
    And lets not forget that dealerships owned by people who either opposed or did not support Barry are being targeted for closure.
    Seems the MSM is choosing not to look into this story. So it must be something to it!
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  6. #6  
    Bumping for corruption.
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  7. #7  
    PORCUS MAXIMUS Rockntractor's Avatar
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    I'll probably end up buying a horse next time but I can't afford a full size one.
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    CU's Tallest Midget! PoliCon's Avatar
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    Quote Originally Posted by Jfor View Post
    Seems the MSM is choosing not to look into this story. So it must be something to it!
    You actually expect the MSM to report news? OBJECTIVELY???? :eek:
    Stand up for what is right, even if you have to stand alone.
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  9. #9  
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    Quote Originally Posted by PoliCon View Post
    You actually expect the MSM to report news? OBJECTIVELY???? :eek:
    Absolutely not! That is why their silence on the matter is deafening!
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  10. #10  
    Power CUer noonwitch's Avatar
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    I'm a loyal Ford customer, so I'm not too worried about GM and Chrysler. Ford makes the Focus, a car that totally meets my needs as a single person who wants good mileage.

    I have a year to go on my current car's payments. I'm buying a new car next year. Ford is trying really hard to sell me a new one now, though. No Ford dealerships are closing, however, and Ford didn't take any bailout money because Mullaley saw what was coming a few years ago and started making the appropriate changes.
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