DETROIT – Auto makers seeking to downsize their dealership ranks should not unilaterally force retailers out of business, says William Bradshaw, chairman of the National Automobile Dealers Assn.
“Individual dealers should decide when they are not making a fair return on their investment,” he tells the Automotive Press Assn. here on Oct. 10. “This is not something that should be dictated by auto manufacturers."
Although domestic auto makers in recent years have taken some steps to trim their dealership numbers,Motor Co. wants to accelerate the process as part of its curtailment of overall operations.
The auto maker says it would analytically decide how much to cut back on itsand Lincoln Mercury outlets, which currently number about 4,300. It has not ruled out offering cash buyouts to dealers.
Bradshaw says, “No one knows what the right number of dealers is. It's a moving target that’s determined by the marketplace."
Dealers know their local markets better than anyone, he says. “Their business is all about adjusting to changing market conditions.”
Dealership reduction efforts should be done on a market-by-market and a dealer-by-dealer basis, he says. “It has to be handled respectfully and individually.”
He says likely candidates to call it quits might be dealers nearing retirement, as well as those with stores in poor locations or operations in need of new facilities, or retailers who conclude “this isn’t the best way for me to be putting in 70-80 hours a week.”
An auto maker that is up today can be down tomorrow, he says. “And the same goes for dealers.”
Bradshaw says it's important to "take the long view" when analyzing the auto industry. He notes that in 1949 there were about 50,000 car dealers. Today, there are about 22,000.