General Motors to Reduce Dealership Network by 1,124

[Administrator]

General Motors will cut 1,124 dealerships loose by October of 2010. The struggling automaker on the verge of bankruptcy sent letters out to the dealerships last week as it searches for ways to reduce it's current dealer network of 5,969 to just 3,600.

GM says it will not renew dealership agreements with the 1,124 companies when their contract renewal comes up in October of next year.

The dealerships being cut are considered to be poor performers and accounted for just 7 percent of GM's U.S. sales last year.

Another 470 dealerships are also scheduled to be let go as GM parts with the Hummer, Saab and Saturn brands. An additional 35 stand-alone Pontiac dealerships will also be cut.

Those dealerships not already notified aren't necessarily safe, however, as the remaining 4,300 stores is still 700 over the 3,600 cap.

The news of GM's numerous dealership closings came just one day after Chrysler announced it would drop 789 U.S. dealerships.

More: General Motors to Reduce Dealership Network by 1,124 on AutoGuide.com

[PerforminNorman]

Wow. I hope our economy turns around soon.

[Tomasy]

This will mean higher prices for the consumer. The dealerships here think msrp is giving you a deal because one dealer controls all the dealerships. If you want to trade something, they want to give you way under wholesale. Most of our cars lately have been bought out of town.

[PerforminNorman]

Originally Posted by Tomasy

This will mean higher prices for the consumer. The dealerships here think msrp is giving you a deal because one dealer controls all the dealerships. If you want to trade something, they want to give you way under wholesale. Most of our cars lately have been bought out of town.

I had the very same discussion with a buddy of mine. I agree, I think the dealers will see it as less competition and more reason for them to gouge. Too bad they have to be like that.

[proexpert]

The list should be made public now. I want to buy a car from a dealer that will still be here for the next five years to provide service. I don't want to buy a car today and find out tomorrow that the dealer was on the list to be closed.