The consolidation of new-car dealerships in the US continued in the first half of the year, although there are signs the worst may now be over, a US newspaper reported.
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The dealership count fell to 18,223 after 258 showrooms shut their doors between 1 January and 1 July, the Wall Street Journal (WSJ) said, citing Detroit-based Urban Science. The consulting firm tracks foreign and domestic dealerships and considers locations closed when they stop selling new vehicles.
The decrease came after a record 1,603 dealerships closed last year in the aftermath of the General Motors and Chrysler Group bankruptcies.
“We’re not through it all yet, however, the worst of the resizing is behind us,” said John Frith, vice president of retail channel solutions for Urban Science. “The wind down of the economy has also bottomed out.”
Manufacturers and their dealerships – especially GM, Chrysler and Ford – are finding an underlying stability since they have lowered their costs, Randy Berlin, Urban Science’s global practice director, told the WSJ. A combined total of 40 dealerships were actually opened during the same period by import brands including Audi, BMW, Kia and Hyundai.
The total number of dealerships will continue to shrink but at a more normal rate of 1% to 2% a year. Last year, the reduction hit 8% and is on pace to finish between 2% to 3% this year, Berlin and Frith said.
