Find Reviews by Make:
CTV.ca reports that GM emailed 245 of its 700 Canadian dealerships notifying them that they’re the biggest losers. According to CNNMoney, this time ’round, GM isn’t basing its dealer downsizing on simple volume. “The auto maker said that, due to the ‘unique aspects’ of the Canadian dealer network, its rationalization efforts will focus on key urban markets. ‘The end result in Canada will be a more competitive dealer network with higher volumes, while continuing to maintain the strongest and broadest dealer network in the country better equipped to serve GM customers.'” In theory. In practice, this is only the General’s opening salvo. The friendly fire is sure to get worse when GM files for C11 at the end of the month.
23 Comments on “GM Culls 245 Canadian Dealerships...”
Read all comments
I’d be interested to know what exactly these “unique aspects” are that necessitate the focus on the urban markets.
I thought that having a Chevrolet dealer sandwiched between a Pontiac and Buick dealer facing a Saturn/Saab was common in the States too.
Not “letters”..They did it by E-MAIL…
Kurt B:
Right you are. Text amended.
35%…that’s a serious culling. I hope that one of the b&b will forward a copy of the email to someone at TTAC (especially the one sent to SOL dealerships). Just curious as to how they broke the news.
Speaking of which I got dumped by email once. By a lawyer no less. Pfft, women.
By email? Oh dear…
It could be worse. I suspect the dealers culled in C-11 will just get “unfriended” on Facebook.
Kurt B: You’ll appreciate the 1:10 portion of this clip:
http://www.thedailyshow.com/video/index.jhtml?videoId=227365&title=Be-a-F@#king-Person—Dealer-or-No-Dealer
Every little Town across Canada has one or more GM delerships, ie locally there is a Pontiac, Buick GMC dealer and another one selling Chevs, all in a population of less than 10,000 people, the surrounding area is very rural, I would think there are too many of these dealers everywhere, there needs to be more culling I think!
35% right now however more to come soon. 43+% Canadian dealer terminations have been confirmed. Not only that its not like in the US where multi brands are sold out of one shop. Ie; “dealers” selling less than 35 cars per year can exist in the US and be counted as part of the “dealer” reductions.
And what was that planned US dealer % reduction again?
Here in Edmonton Alberta, there’s:
6 Buick/Pontiac/GMC dealers
6 Chevrolet dealers
2 Saturn dealers
(2 Cadillac, 1 Saab, and 1 Hummer as part of above)
Compare that with:
8 Ford dealers
8 Chrysler/Dodge/Jeep dealers
4 Honda dealers
5 Toyota dealers
4 Nissan dealers etc.
I’m sure it’s the same story in other Canadian cities. It’s the import dealerships that aren’t over-retailed.
Every little Town across Canada has one or more GM delerships, ie locally there is a Pontiac, Buick GMC dealer and another one selling Chevs, all in a population of less than 10,000 people, the surrounding area is very rural, I would think there are too many of these dealers everywhere, there needs to be more culling I think!
(emphasis added)
I believe GM Canada indicated that they would concentrate closures in rural areas where there is too much overlap and (unsaid) too much stiff competition from the imports.
Rural dealerships are often an integral part of those community’s economies, and provide a great deal of the heavy-duty pickups that farmers and ranchers *need*.
I learned today through my local paper in Regina that none of the GM dealers in the city will be cut, although there are two Chev dealers (and one PBG-C mega-store).
I assume that Canadian GM dealer franchise contracts are with GM Canada. Does this mean that GM Canada is going to file for bankruptcy at the same time as GM in the US, so they can avoid the ensuing class action lawsuits?
Chrysler Canada hasn’t filed for bankruptcy, but Chrysler hasn’t terminated any Canadian dealers (yet).
Within an hour of GM axing the American dealers.I
googled and had a list.So far its a secret in the great white north.
I got a Chev dealer a half our walk from my front door,and I trust them.Roy Nichols Chevrolet is the only one in the area,not renovated.It looks kind’a grim.
The Chev dealer and the Pontiac Buick dealer in Oshawa are owned by the same guy.Speculation has it,they may conslidate
“Rural dealerships are often an integral part of those community’s economies, and provide a great deal of the heavy-duty pickups that farmers and ranchers *need*.”
The small town dealerships have relied on these people in the past to “do the right thing” and “shop local”
In an age when you can shop and compare prices and search the best deals without leaving your home the small town dealers are at a real disadvantage. Larger urban dealers can often beat them on price based on volume discounts.
Consumers are much more educated today and less likely to put much value into buying from a dealer based on proximity and sentiment.
The dealers being culled are chronic underperformers or they wouldn’t be on the chopping block.
My local dealer has had the same 8 Chevrolet trucks sitting in the front row for 2 months now.
I would hate to think that any of my tax dollars would go towards keeping his dealership alive.
The convenience of getting parts locally will be gone but I can’t deal locally. He refuses to match what is offered at the larger dealerships and says that he won’t sell at those prices because he can’t make enough money.
Good riddence to him and those like him.
@ rtx:
None of what you said is incorrect per se, but let me state a few things in response:
In my home province the largest GM dealer is in a community of 1800 that is full-line and sells on the volume idea you mentioned.
Said dealership often beats many of the big city dealers on price and service.
While you may be keen to see your local small dealer go away, I have found that the rural dealerships are the absolute best and purchase my vehicles almost exclusively there.
I won’t belabour this point, but tying the rural dealerships in Saskatchewan with the big bad idiotic GM management is a stretch and I will defend against such sentiments.
I chatted with one of my fleet contacts this AM at a local Chev dealer, he said that the dealer principle is thrilled, instead of one in 750 gm dealers he’s now 1 of 450. Value of his franchise just increased. An interesting perspective.
Having been on the inside of GM for many years,I can confirm many of the rural consolidations in the dealer network already took place naturally as the expenses grew and margins shrunk. The rural guys aren’t the problem, they typically have the highest customer loyalty and satisfaction scores. And their profit per unit sold is solid, because of strong used car and service departments.
The problem are in large metro areas like the GTA where there are way too many dealerships compared to the import stores. Plus many of those stores are located where their clients were 50 years ago. But demographics have changed and much of the network hasn’t adapted.
The problem GM is trying to address is the number of sales per dealer which for them is one of the lowest numbers in the industry (around 400-450 IIRC) vs. Toyota around 800/store average.
Rural dealerships R-U-L-E, at least here in Canada. For both cars and bikes. No better place to purchase and do warranty work. No B.S., everyone treats you well, and it is because they need to: Nowhere to hide.
I make a point of travelling to my wife’s family farm 300kms from Vancouver to deal with a specific Toyota and a Yamaha/Honda dealer for my kids toys. The funny part is the extended family that lives in the farm, all Volvoholics, needs to come to Vancouver to deal with a specific Volvo dealer.
In my home province the largest GM dealer is in a community of 1800 that is full-line and sells on the volume idea you mentioned.
Yes, well, that one probably isn’t getting cut. I doubt that they’d be so stupid as to cut all rural dealerships, as opposed to cutting just the small ones with low sales.
Of course, never underestimate the stupidity of GM, I suppose.
Yes, well, that one probably isn’t getting cut.
Yet.
According to thess stories:
http://www.cbc.ca/money/story/2009/05/20/gm-dealerships-dropped.html?ref=rss
http://ca.news.yahoo.com/s/capress/090520/business/gm_dealerships
GM isn’t actually closing all of the dealerships, some dealers will just not get their franchise agreements renewed when they expire in October 2010. And the figure of 245 is just the start. Apparently GM wants no more than about 375 dealers when all is said and done.
Highwayman: “The rural guys aren’t the problem, they typically have the highest customer loyalty and satisfaction scores.”
Agree with you except when the rural dealer becomes a whore and will sell vehicles to used car dealers or off make dealers in other markets for 500 over. Even CFO of GM said rurals were the strength of GM in the Feb 09 submission to congress.
Emails were sent because if letters had been sent it would have taken two or three days in someplaces for fed ex to get the news to some dealers. Everybody knew what was up in one day.
The too many stores in the gta’s is the accident of history. Before the 1988 Hyundai Pony Verdict made it okay for imports to DUMP (sell vehicles at a unit loss profit) the network was right sized. Last new GM dealership appointment in toronto was 1991 (other than saturn, nuff said). Most of those dealers have survived till now but with the new realities of the Made-In-New-York-City Worldwide Credit Implosion it is about to get much, much uglier. This program will allow the dealerships to wind down their dealerships in a dignified manner and give their employees the time they need to find alternate employement.
I thought that having a Chevrolet dealer sandwiched between a Pontiac and Buick dealer facing a Saturn/Saab was common in the States too.
That would be Courtest Chev above, stuck right up against Popham Pontiac-Buick-GMC and just down from Queensway Saturn-Saab-Hummer. I used to frequent Queensway for warranty work on my 9-3. I’d feel bad for Queensay’s owner if he wasn’t already quite well off.
What you don’t see is the eight other BPG dealers, or the seven Chev dealers, or the two Saturn/Saab dealers all within a 10km radius. Madness. There’s not as many dealers combined for the other brands, even adding in Ford and Chysler, in that same area, and GM marketshare in Toronto is behind that of Toyota or Honda. I have no idea how these dealers make money, especially since they all sell the same goddamn cars.
Forget rural dealers, the urban concentration is stupid. More than 10% of that 245 could be in the GTA alone, and GM has floated these guys for far too long.
Remember the Uplander/Relay/Terraza/Montana? The reason GM does stuff like that is to give dealers something to sell that was in some way different from the exact same vehicle with a different nose that was on sale across the street. The smart thing to do—fifteen years ago—would have been to let every dealer sell any vehicle from any of GM’s brands, eliminated the artificial overlap, and let the dealers fight it out as nature intended. But that would have required someone at GM to have a) forethought and b) fortitude.
After reading all this I am certain GM’s marketshare will never surpass 15% by 2012.