Two years ago General Motors had 6,049 dealers spread across the United States. Post-bankruptcy, that number is down to 4,500 retail outlets. The dealer cutback was supposed to help GM's bottom line while simultaneously bolstering sales and profits at the remaining dealerships, but has it worked? Automotive News reports that the early returns are mixed.

Since 2009 was such a bad year for car sales, most GM dealers are faring better so far in 2010, as the company's overall sales are up six percent. Consider that GM is selling six percent more vehicles without Pontiac, Hummer, Saab and Saturn, and the remaining dealers are doing better still. But the biggest winners of GM's dealer reduction aren't large dealerships. Many of the 1,500 dealers that got the axe were smaller stores in rural areas. It makes sense, then, that the remaining small-town dealers are doing better as a result.

GM spokesperson Ryndee Carney tells AN that the surviving dealers have a reported 6.7 million customers up for grabs; people who either own a GM vehicle from one of the defunct brands or purchased from a dealership that no longer exists. That's a lot of potential warranty, service and trade-in cash waiting to be had. To ensure that these customers know where their nearby dealerships are, GM has been mailing out notices with service coupons and other dealer info. Dealers themselves are also doing legwork to pick up orphaned customers, picking up out-of-work salespeople who bring their client lists with them.

It's hard to tell how long it'll be until the remaining GM dealers start to feel the impact of the closing of 1,500 dealers, since many of those stores just stopped selling and servicing vehicles in October. The one thing that the entire dealer body would benefit from is a stronger auto market, but that doesn't appear as though it'll happen anytime soon.



More...