Chrysler says it will close 789 dealerships

[Sobomaster]

Originally Posted by BadStratRT mopwr2u, where did you get that information? i know a few dealership managers, and there were a handful of things that were considered. sales volume was one of them, but years back, chrysler told every dealership that they wanted them all to carry all three brands..dealerships who refused arent looked upon favorably. also, dealerships that cost money, carrying a huge floorplan with lower sales volume hurt the chances of staying open as well. basically, if you didnt cost chrysler money, and if you "played nice" (taking on other brands...taking on more floorplan to get cars off factory lots), then chrysler views the dealership more favorably. What BadStratRT says is basically correct. There were many factors. Sales was one of them, but they looked at sales as a percentage of inventory and revenue compared to expenses. Selling 20 cars a month when you only have 100 on a small lot may be great compared to selling 40 cars a month when you have 600 on a large lot. Also, they wanted dealers who carried Dodge, Chrysler & Jeep. If you didn't carry all 3, then it was a huge disadvantage. Lastly, there were other factors - did you pay Chrysler on time? Did you owe Chrysler money? Etc.

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[Sobomaster]

GM just announced they are closing 1100 or 1200 dealerships (depending on what you read). They also plan on cutting a total of 3400 dealerships. The main difference is that these dealerships simply won't have their contracts renewed in 10/10, so they are not immediate closures like with Chrysler. I tried to Google the full list but couldn't find it easily. Maybe it's not out yet.

[BadStratRT]

i dont think that it is...i believe that in most cases, GM dealerships havent found out yet...theyre supposed to get a phone call or a fedex letter..

[MOPWR2U]

BadStratRT,
I talked to a sales person at one of the seven dealerships near me that were closed yesterday. I know the person separate from his work at the dealership and believe that he would tell me the truth, ... as he knows it. When the dealership got the news that Chrysler was dropping them the staff was called into a meeting, and that is what they were told. They were told it came down to number of vehicles sold, and that dealers that were averaging less than 40 a month were dropped.

I live in Cedar City, UT, and the dealership closures have seemed to hit our area harder than most. We have a Dodge dealer and two Jeep dealers in our town, and all three were closed. We have a Dodge dealer 50 miles away in St. George, and it was closed. We have a Dodge dealer 150 miles away in Nephi, and it was closed. We have two Dodge dealers 200 miles away in Provo, and they were both closed. I now have to drive to another state and go to a dealer 200 miles away in Las Vegas, or drive to a dealer 250 miles away in Salt Lake City to stay in the same state, if I want to go to a Dodge dealer.

I've been a Mopar fan my whole life. I've owned close to 30 Jeeps, a dozen different Dodge trucks at least, and own the Dodge Challenger now. I will not be buying another vehicle that I have to drive 250 miles to get to a dealership though.

I fail to see how Chrysler's dropping dealerships will improve their profit. Perhaps someone could explain that to me.

[cyclone429]

A group of managers sitting in a office have no common sense, thier's no loaylity, no back up plan. Its called save your ASS and Save your ASS now. Take away the emotion, stick to the facts and cut, cut deeply and cut effectively.

Its stpuid for sure, emotion drives us to buy, than if we have the cash, we figure out how to buy. Take away the product, take away the means to the product and you have no one owning the product and you open up to the Hondas and Toyotas of the world who will offer the emotion and means to buy.

All this bull **** in the worlds markets were not created by you or I, Profits, desire, no common sense economic prinpeaps and over supply and screwing over of every one who trusted were they should have asked, as led us here.

Keep All the dealerships open, sell the cars/trucks on line, set standard pricing for every one, let the dealshis stay open to earn your service buisness.

Dodge has to equal out thier pricing for every one the U.S.A and offer the deals, people waiting for prices to drop are still out thier, thiers still big time money waiting to get back into the economy.

Its a slap the face and a swift kick into the family ***els of chrysler owners who can become honda or toyota owners out of spite..

I bet the Hyundia and the Indian crap car companies are loving every minute of this, under vaule the US. Car market, sell crap, get the consumer hooked to buy every couple of years a better version of the crap..will not work again for the big three..

[mopowar]

Originally Posted by Shumdit

Chrysler does not own or lease the land that dealerships are located at, so there is no reason that would be a factor in their decision. If you think Chrysler would have taken what you mentioned into consideration for the benefit of the dealers they were cutting off, you need to hope no one shows up at your cubicle with a cup they want you to pee in tomorrow

No worries mate. My office is in my house, and I only smoke every morning so nothing would show up anyway.

Yeah, I thought about that after I posted it, but didn't bother changing it. I suppose it would be the respective dealers that own or lease thier lots. I am still trying to make sense of it. I know that one of the dealerships here that is closing moved more product than the one where I bought my truck that is staying open. I am thinking that maybe it is not just shear number of units moved, but could have something to do with number and type of the vehicles sold with respect to lines that they are keeping and ones that they are ditching.

The one that is staying open has a lot full of trucks with a handful of jeeps, 300's, mini-vans,etc. mixed in.

[BadStratRT]

i think that what will happen (or what they are shooting for) is that dealerships will close now, and then the business will grow at the remaining dealerships. as the market improves, eventually, the need will arise for another dealership, and another..etc.

im certain that it was more than just sales numbers, and here is why i am...i know someone who owns a very very small dealership in ohio. his showroom only holds maybe 3 vehicles, and his lot probably doesnt hold 30 cars. last time i was there, he was the salesman, he had a parts/service guy who was also the mechanic, and they have a body shop guy. they also have a receptionist. its a tiny dealership, and i would be surprised if he sold anywhere near 40 cars a month...he would have to sell a car a month to every person in town...

however, his dealership was not among those closing...because he doesnt COST Chrysler any money.

I also know a little more about some local dealerships, but theyre not things that Im free to ramble about on the internet...

[turbot_bird]

found this: http://www.autonews.com/assets/pdf/C...lersremain.pdf

looks to be a list of dealers that will still be open

[Sobomaster]

If you look at the list of dealers that were closed, then you can notice that a lot of them (definitely not all of them though), only sold just Dodge, or just Jeep. Also, a lot of them, according to a piece by BusinessWeek, also sold other vehicles such as Ford or Toyota, on the same lot.

[Sobomaster]

I know a lot of people have wondered how dealerships hurt Chrysler or GM and according to responses from the CEOs of Chrysler & GM and Obama administration officials, too many dealers cause increased competition resulting in deeper discounts on Chrysler & GM vehicles. It may not be the best answer, but it's the only one I've seen.