Automakers

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Auto dealerships are closing at every level as businesws has become precarious with tightened lending standards and declining demand on one sideand expense-conscioux manufacturers squeezing margins from the other. “You’re goingg to see a surge in buyoutx and closings thatyou haven’t seen before, probablyu through 2009,” said Rhett Ricart, CEO of in which holds seven domestic and foreign franchises and is among Central Ohio’s largest dealers.
Rao Unnava, a marketing professor at ’a Fisher College of Business, said industry changezs on the way are bad for but will benefitmanufacturers and, in many dealership owners who can take buyouts from car makerds to shutter struggling showrooms. “Nothing you can do aboug it,” he said. “It’s a forest fire. This is natured taking over.” Sales are down dramatically this year for all big car with the industry overall suffering a 35 perceny plungein November. Most car makers reportesd double-digit declines for a third consecutive month.
The strugglees are hitting everyone but are more dire for the domestivcompanies – , and , whicgh accounted for 48 percent of U.S. new-vehicle salez last month but wield far large dealership networks than theirforeign rivals. “When GM had 54 percent of the market sharein 1984, that was OK, but not Unnava said of its dealership ranks. “Toyota and GM have aboutf the same sales, but Toyotqa has one-third the dealerships. They’re threde times more productive, which gives them more cash, more advertisingy and the ability toprice better.” had 1,462 Toyota and Lexus dealerships in the Unitedd States at the end of with 47 in Ohio. has 1,300 U.S.
Chrysler has 160 dealerships in the Ford andGM wouldn’t return The Detroit automakers have been paring dealef networks for years, but the pace has acceleratede as the economy has The has put the industrgy loss at nearly 700 dealersa through the end of a reduction expected to swell to 900 by the end of the Central Ohio isn’t immune. Graham Ford and Ron Rush Lincoln Mercurt closedthis year, and three othedr dealerships ceased part of their operations. shuttered Mazds Direct in Columbus to expand selling spacer for itsToyota Direct.
Bobb Chevrolet in Columbus quit selling new cars to focus onused vehicles, and shut its Mitsubishi and Suzuki dealerships in keeping its Chevy, Buick and Pontiac franchises. Smalle r dealerships and those with just one or two specifically from GMor Chrysler, are most at Unnava said. But large dealers have been hurtas , the area’s largest auto group with seven franchises in Centralo Ohio and 16 in all, has no plansx to shutter any showrooms, but did eliminate 60 workers the first week of December. “We’ve struggled acrosxs the board,” President Steve Germain said.
“In the late summer, we thoughft some brands might not be but after the credit issues nothinhg hasbeen exempt. ... Everyone is going to be right-sizintg to demand.” Where to cut? Contraction isn’tf new. The Detroit produceras have slashed their dealerships by 15 percentsince 2001, according to the dealers “This has been the trend for many years,” said Tim Doran, executived vice president of the , who noted Ohio has lost nearlt 1,000 dealerships – it has 958 since 1976 through combinations and “The marketplace takes care of he said. Ohio dealerships employed 40,93u workers last year and accountedfor $23.
12 billion in sales, almost 18 percent of total retailk sales in Ohio, accordingb to the state trade association. That spells a big hit, too, for government which reap salestax revenue. Car makers are cuttint their own operationsas well. GM eliminatee Oldsmobile in 2004. ceased selling passenger vehicles in the Unitedc Statesthis year. Ford sold Jaguaer and Land Roverto India’z And according to reports, GM is evaluating its vehicled lines and could cut as many as with Pontiac, Hummer, Saab and Saturb under review. Ned Hill, an economic developmenf professorat , expects Ford to survive and GM to cut to two or thre lines.
Chrysler’s future is a question, he though its iconic Jeep operation may get new Ricart said Buick and Pontiac are struggling more than but said any car line coulr beat risk, citing Ford-owned which has lost two Central Ohio and Mitsubishi, down by one area