881 dealers closed in 2008

Dealerships dropped like flies in 2008, with 881 retail stores resigned to history at year's end. The steep drop in vehicle sales and difficulty finding cash to finance inventories were the main reasons for the record decline, but 2008 won't likely hold that title very long. While vehicle sales dropped 18% in 2008 to 13.2 million vehicles, many analysts are expecting 2009 sales to plunge all the way down to 10 million units. The additional drop in sales, along with domestic automakers' drive to consolidate their dealer networks, will likely make 2009 very difficult on franchises. Predictably, domestic-brand dealers were the hardest-hit, suffering 80% of the overall casualties. GM, Ford, and Chrysler are likely hoping the trend continues through 2009, as Detroit automakers have less than 50% of the US retail market and closer to 75% of the overall dealerships. Reuters