Thursday, June 4, 2009

Less Dealers Does Not Mean Less Sales

When GM and Chrysler announced they were reducing thousands of their dealers nationwide, it was a blockbuster announcement. But it shouldn't have been.

The "fired" dealers, in some cases, gave up and conceded defeat. In other cases, they vowed to fight to be retained. It's too bad that the first time some of those dealers fought for their lives was after it was essentially too late.

I read an article that stated Chrysler eliminated dealers that represented 14 percent of their sales. That sounds like a lot. In reality, those dealers represented close to ZERO percent of Chrysler's future sales. Now, if a customer wants to buy a Chrysler, they have to drive an average of 1.3 miles further to buy one. No big deal.

Chrysler and GM feel they will do fine without those dealers because they were, in most cases, dead weight. They didn't commit to the brand, they didn't have high customer satisfaction and they didn't sell as much as a dealer 1.3 miles away.

It's tempting to feel that we're more important than we are, but sometimes we're just taking up space.

Barry LaBov
LaBov & Beyond

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