Hey Dennis, This isn't anything new. The approach and method might be, but manufacturers have been doing this for at least 20 years. market research studies are used to show that there are too many of the 'Big' three dealers, fewer dealers in their opinion would mean each dealer would sell more cars, therefore more profit per dealer. And as the North American market share drops, each dealer sells fewer cars....
GM did a market re-alignment about 5 yrs ago and literally married 2or3 dealers and got 1 to buy others out, with expectation of newer stores. Ford (in Canada) converted the Mercury dealers to Ford. In time many had no choice to close or took a cash out (a class action suit followed). Chrysler closed the Plymouth stores.
What we don't know is all the boardroom politics that occured to get dealers to close, merge, sell to another operator, or take, 'buyouts'. The companies have always been very nasty and have expensive lawyers; threats using cars sold out of market, alledged fraud or improper paperword, sales and service audits, to name a few way used to intimidate...
The report I saw was the dealer's version. I do know that the Companies' Sales & Service agreements usually allow return current model year vehicles and parts purchased in the last 12 months. If the dealer's inventory is not turning I can understand the panic. I have seen inventories where over 55% is more than a year old. And yes, the reps will say if you refresh your instalations, Regional Management will be more favorable towards you. But in the end that's just the rep's word, even Regional Managers are just glorifed puppets looking for their next promotions and after they get what they want, well you know.
From what I know the imports are really not any better, it's just that they have a younger network which ws in a growth mode. Go out and try to buy a Toyota or Honda franchise and see how mnay hoops you need to go trough and how many managers you need to grease. It is just too bad the main cataclyst in this case ahs been the real estate/stock market, yet there is more ink flowing when talking about the auto sector....
Denis
