I ADMIT I HADN'T THOUGHT ABOUT THAT

By Bob Walsh

 

Once upon a time if you owned as Big 3 auto franchise you were in pretty good shape. They rarely went broke.  They did have to move once in a while due to changing demographics, but that happens.  Then back in the late 1960s when the Japanese and German products started making major inroads things got a bit interesting.  You sometimes saw dual dealerships.  FREDS PONTIAC AND TOYOTA and stuff like that.  The big American brands didn't like that, but they mostly hadn't though to structure their dealerships to prevent it.  

Now days it is something new.  Electric cars are actually killing off dealerships due to the necessary investment in equipment.  Not quite half the Buick dealerships in the country have taken buyouts this last year and closed down rather than invest tons of money needed to service electric cars, which are not selling anyway.  It costs a smallish dealership a minimum of $300,000 to set up to sell and service EVs.  

Something similar has happened over the last few years with Cadillac.  They used to have 870 dealerships in the U.S.  About 20% have taken buyouts in the last three years rather than make the investment.  GM is paying out between $300,000 and $700,000 to buy out the franchise of a Cadillac dealer.