DETROIT (AP) — General Motors' CEO said its sales network isn't shrinking fast enough and the automaker wants to step up dealer consolidations.
Rick Wagoner said efforts will be specific to combining Pontiac, Buick and GMC dealerships into one channel, The Detroit News reported Saturday.
''It's time to do that and the payoff is significant,'' Wagoner said during a recent presentation to Wall Street analysts.
General Motors Corp. reduced its dealer network by about 7 percent between 2005 and 2007, to 14,118, The News reported. In some cases Hummer and Saab have merged.
While the Toyota brand and GM's Chevrolet brand sold almost the same number of vehicles in 2007, there are just 1,244 Toyota dealerships, compared to more than 4,000 for Chevrolet.
Ford Motor Co. and Chrysler LLC have also been working to shrink their dealer networks.
''The profit per store is much lower at the domestics, and this contributes to the strength and health of Toyota and other networks,'' Tom Libby, an analyst with J.D. Power and Associates, told The News. ''It's obviously out of sync to have 4,000 dealers versus 1,200 and have the same amount of volume, and they need to fix it.''
Dale Willey, chairman of the National Automobile Dealers Association, said a large number of franchises drives competition, with consumers benefiting.
''Dealers make the decision to get into the business, and the manufacturers accepted the dealers getting into the business,'' said Willey, who is a GM dealer. ''It ought to be the dealers' decision to get out of the business.''
The glut of GM dealers is most common in larger markets, especially in the Northeast, said Mark LaNeve, GM North America vice president of vehicle sales, service and marketing.
''Our dealer system went in at the end of World War II, when we put in a dealership in every little hamlet,'' he said.
LaNeve would not say how many dealers GM would eventually like to have.
