GM plans more dealer consolidations

Even after eliminating hundreds of U.S. dealerships in the last few years, General Motors Corp.'s massive sales network isn't shrinking fast enough.

GM CEO Rick Wagoner said the automaker will look to step up dealer consolidations, specifically efforts to combine Pontiac, Buick and GMC shops into one channel in which a single dealership would sell all three brands. “This is a frontier where we plan to increase our efforts," Wagoner said during a presentation this week to Wall Street analysts. "It's time to do that and the payoff is significant."

GM reduced its dealer network by about 7 percent between 2005 and 2007, to 14,118 from 15,094 franchises. The automaker's consolidation efforts have centered on melding GMC, Pontiac and Buick dealerships into one line of stores. In some cases, Hummer and Saab dealers also are being merged.

But the automaker still has a glut of dealerships compared with leaner networks of foreign rivals.

GM's Chevrolet brand, for example, sells cars and trucks at more than 4,000 U.S. stores while the Toyota brand has 1,244 dealerships. The two brands sold an almost identical number of vehicles in 2007.

Automakers prefer a smaller number of large and modern dealerships over many smaller, marginally profitable shops. Detroit News