6/03/2009

Another GM Misstep

It’s true that GM is between a rock and a hard place in this economy and there’s no easy fix for the mess they’ve gotten into.  There will be some unintended consequences to the decision to reduce dealers from 5,969 dealers to 3,600 by the end of 2010 - Some not so good.

Automotive experts say the big reasons behind the dealer cuts are to reduce inter-brand competition that drives down prices.  That’s fine if GM were just competing against itself, but it’s not.

In Orlando, Roger Holler Chevrolet was notified that two of its dealership agreements with GM will not be renewed at the end of October 2010. The Holler family has been selling GM cars in Orlando since 1938. They have been so successful that they also operate dealerships that sell Hondas, Hyundais, Audis, and Mazdas.

If GM thinks that competing against itself was bad, just wait until they start competing against other car makes.  Here is a quote from the Orlando Sentinel:
Roger Holler said he intends to pursue "a Plan B, because those are very good locations, with excellent potential," which could mean seeking another brand to sell.
GM is telling Holler he can’t sell Chevys, so he will have no choice but to sell something else at his prime locations.

I’ll bet Honda, Hyundai, Audi or Mazda would love to have Holler sell hundreds of their cars.