According to Jim Press, the co-president of Chrysler, dealerships are across the country are being urged to merge in an attempt to rid the automaker of redundancies. Press stated, "If (dealer) consolidation doesn't occur before the product goes away, it will be more difficult for dealers to get what they want" for their stores. This is part of what is being dubbed as “Project Genesis,” a move which will require dealers to focus on the three main Chrysler brands, Dodge, Jeep and Chrysler.
Press continued, "If (dealer) consolidation doesn't occur before the product goes away, it will be more difficult for dealers to get what they want" for their stores. There were no numbers given (to dealers), just directional concepts.” It is expected that the changes will be implemented across the country over the next four years. He mused that the brand really doesn’t need 11 SUV’s across the board when only three or four sell well. By consolidating, it is hoped that Chrysler will become more profitable as a whole.
This could mean that hundreds of dealerships will be eliminated across the United States, and although his presentation included axing dealerships in Boston and Denver, Press commented that these weren’t hard figures or decisions yet, just hypotheses. He stated, "There were no numbers given (to dealers), just directional concepts.”
GM may also be implementing the same tactic in their dealerships. They are expected to cut up to three times as many dealerships this year as they did in 2006. After all the closures, GM has been left with about 2600 dealerships as of January in this year. 2007 saw the close of 260 stores, up from 87 that were closed in 2006.
Mark LaNeve, the vice president of GM’s sales, marketing and service, stated that this is part of a process which will attempt to consolidate the brands GMC, Pontiac and Buick under one happy roof. "Do we have a lot of work ahead of us? Yeah," LaNeve said. "Do we need to accelerate our efforts? Maybe. We probably will do that. We have markets today where we have the exact right number of dealers," he added. "We have other markets where we probably need some very significant consolidations."
It is hoped that these consolidations will help the company remain profitable, despite declining industry volume. Many carmakers are having difficulties remaining competitive and dealerships that specialize in only one brand are suffering. By consolidating the three big brands under one roof, many believe that sales figures may improve. How this will be accomplished remains to be seen. When asked if there are any specific numbers for dealer reductions in mind, LeNeve did not comment.
The amount of GM affiliated dealers has gone through a steady decline since the mid 1990’s when the high count was nearly 9,000. This is a sharp decrease and if sales figures continue to slump, even more reductions can be expected.