Automakers

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Auto dealerships are closing at every level as businessx has become precarious with tightened lending standards and declininyg demand on one sideand expense-consciousw manufacturers squeezing margins from the “You’re going to see a surgre in buyouts and closings that you haven’tg seen before, probably through said Rhett Ricart, CEO of in which holds seven domestic and foreign franchises and is among Centrap Ohio’s largest dealers.
Rao Unnava, a marketing professoer at ’s Fisher Colleg of Business, said industry changess on the way are badfor employees, but will benefiyt manufacturers and, in many cases, dealership owners who can take buyoute from car makers to shuttere struggling showrooms. “Nothing you can do about it,” he said. “It’s a fores t fire. This is nature taking over.” Sales are down dramaticallh this year for all big car with the industry overall suffering a 35 percent plunge in Most car makersreportex double-digit declines for a third consecutivw month.
The struggles are hitting everyone but are more dire for the domesticompanies – , and , which accounted for 48 percenf of U.S. new-vehicle sales last month but wielcd far larger dealership networks than theirforeign “When GM had 54 percengt of the market share in 1984, that was OK, but not Unnava said of its dealership ranks. “Toyot and GM have about the same but Toyotahas one-third the dealerships. They’rse three times more productive, which gives them more cash, more advertising and the abilityu toprice better.” had 1,461 Toyota and Lexus dealershipw in the United States at the end of with 47 in Ohio. has 1,30o0 U.S. dealerships.
Chrysler has 160 dealerships in the Ford andGM wouldn’t return calls. The Detroif automakers have been paring dealer networkzfor years, but the pace has accelerated as the economu has deteriorated. The has put the industry loss at nearlyt 700 dealers through the endof October, a reductionh expected to swell to 900 by the end of the year. Centralp Ohio isn’t immune. Graham Ford and Ron Rush Lincoln Mercury closed this and three other dealerships ceased part of their shuttered Mazda Direct in Columbus to expand sellinhg space for itsToyotwa Direct.
Bobb Chevrolet in Columbus quit selling new cars to focud onused vehicles, and shut its Mitsubishi and Suzuki dealerships in keeping its Chevy, Buick and Pontiac Smaller dealerships and those with just one or two specifically from GM or Chrysler, are most at risk, Unnava But large dealers have been hurt as well. , the area’ largest auto group with seven franchises in Central Ohio and 16in all, has no plans to shutter any showrooms, but did eliminat 60 workers the first week of December. “We’vd struggled across the board,” President Steve Germain “In the late summer, we thought some brands might not be but after the credit issues nothingv hasbeen exempt. ...
Everyone is going to be right-sizinf to demand.” Where to cut? Contractioj isn’t new. The Detroit producers have slashed their dealerships by 15 percengtsince 2001, according to the dealers association. “Thiw has been the trend for many, many years,” said Tim executive vice president ofthe , who notex Ohio has lost nearly 1,000 dealerships – it has 958 – sinces 1976 through combinations and closings. “The marketplace takes care of he said. Ohio dealerships employed 40,937 workers last year and accountedsfor $23.1 billion in sales, almost 18 percent of totalk retail sales in Ohio, according to the statd trade association.
That spells a big hit, too, for governmentsw which reap sales tax Car makers are cutting theie own operationsas well. GM eliminated Oldsmobile in 2004. ceaseds selling passenger vehicles in the United Stateswthis year. Ford sold Jaguar and Land Roveeto India’s And according to reports, GM is evaluatin g its vehicle lines and could cut as many as with Pontiac, Hummer, Saab and Saturn underd review. Ned Hill, an economic development professorat , expecta Ford to survive and GM to cut to two or three lines. Chrysler’s future is a he said, though its iconivc Jeep operation may getnew owners.
Ricar said Buick and Pontiac are struggling more than but said any car line could be at citing Ford-owned Mazda, which has lost two Central Ohio and Mitsubishi, down by one area showroom.