Whats driving the fact that there are too many dealers?
In the ’50s and ’60s, the manufacturers thought that they would sell more cars by having more distribution points. They figured they would maintain increased market shares, more sales, and they just kept putting dealerships on a lot of different corners. Right at the end of World War II there were fifty-some-odd thousand dealerships in the United States; it’s now down to 22,000 because they can’t support that infrastructure and, they probably really need to go down to about 12 14,000. That would give them a lot more economies of scale and efficiencies. It would also ultimately affect positively the experience for consumers, because the dealers would be selling more cars in their local market areas and would drive more efficiencies through higher volumes. But it seems to have stalled in the last 15 years at about 20 24,000 dealers. Just stalled. There’s been no more consolidation because the dealers have either hung on or the factories have continued to replace dealers that have gone ou
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