Just too many dealers?
The automobile situation is surely a mess. But I did get a bit of a better understanding of it yesterday on CNBC. I'll use round numbers. There were approximately 2,600 Chrysler dealerships nationwide last year. With the closing of some 700 dealerships, Chrysler is left with 1,900 dealerships nationwide. Honda, which outsells Chrysler monthly, has only 1,300 dealers nationwide. So with less dealers, Honda sells more cars. It seems many in the auto industry feel that with so many dealerships, each Chrysler dealer was in fact competing against another Chrysler dealer. I don't know if I buy that thought, though. What it comes down to is building a better vehicle. They can call it the "new" Chrysler or the "refined" Chrysler or the "lean and mean" Chrysler organization, but they have to build a better car. Then they have to figure out how to get the next generation out of their BMW's and Toyotas and Hondas and Nissans and back into a Chrysler. It's a tough sell. They could do everything right -- become lean and mean, build a great new car, and have nobody buy it because people don't want to take a chance on a new Chrysler. Good luck.
|