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Chrysler to close 789 dealerships nationwide


May 14, 2009 - 10:59 AM

We’ve been hearing news for months that the big three auto manufacturers were suffering. Now Chrysler has petitioned the bankruptcy courts to close approximately 25% of its dealerships.

Annalists predict that the majority of the 789 dealerships on the chopping block will be in suburban areas with multiple dealerships. Only the profitable ones will survive.

Chrysler had a total of 3,181 authorized dealers in operation at the time of its April 30 bankruptcy court filing, according to court filings. Just over half of that number accounted for more than 90% of Chrysler sales, according to the filing.

According to sales data, about 50% of Chrysler’s authorized dealers in operation in April accounted for about 90% of Chrysler’s sales – so this move should not negatively effect sales and should, in fact, boost profitability.

Chrysler is still in partnership discussions with Fiat.

In a similar move, General motors plans to cut its dealership base by next year. Currently General Motors has over 6200 independently owned dealerships nationwide and they feel that if they could cut these down to around 3600, they would have a more profitable network of sellers.

In the past, automakers' efforts to close dealerships have not been successful as there are state laws that protect franchisees. Bankruptcy court judges, however, can override such laws



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Tags: chrysler bankruptcy, chrysler dealerships, GM, General motors



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