Import Dealers Starting to Close

Four months ago, it would have been unthinkable -- dealerships selling brands such as Toyota and Nissan having to close because of floor plan issues. But it's happening.

Last week, California megadealer Mike Kahn shut the doors to three Nissan dealerships in southern California and another Nissan store in Fremont and a Toyota dealership in Oakland.

Kahn had just put the finishing touches on the Toyota store's new $35 million facility two weeks ago when Nissan's finance arm pulled its floor plan from his Superior Automotive Group.

Sources tell me that we likely will see more high-profile import stores close this year, not only because of the credit issue, but also due to the high rent factors many dealers are paying on large palatial facilities they've built to be compliant with their auto maker standards.

In a bizzare twist, auto makers may lose the very dealers they want to keep, while others that resisted upgrading their facilities the last few years survive because they don't have huge bills to pay.