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Thread: One in five U.S. car dealerships may fail in 2009

  1. #1
    Vulture of The Western World Eric's Avatar
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    One in five U.S. car dealerships may fail in 2009

    As many as 3,800 U.S. car dealerships could fail this fall and into 2009 - nearly one in five - because of weak sales, increased operational costs and the credit crunch, according to a forecast released on Wednesday.

    "An increasing number of dealers are simply closing their doors because sales have plummeted, credit has dried up, the overall retail environment is increasingly challenging and potential investors are sitting on the sidelines," said Paul Melville, a partner with Grant Thornton LLP, which issued the forecast.

    "In addition, the domestic automakers who badly need retail consolidation are not spending much of their scarce capital on the problem because the economy is doing it for them," he said.

  2. #2
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    Re: One in five U.S. car dealerships may fail in 2009

    This might be how Ford gets rid of Mercury -- let the economy close the majority of the dealerships for them.

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

  3. #3
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    Re: One in five U.S. car dealerships may fail in 2009

    It will be interesting to see which types of delerships survive. Will it be the monster mega carlots or the family-owned type that have been around for decades. One is operating on pure debt and and floorplan financing. The other typically operates on capital and goodwill built over the years.



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