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The General Goes from Coast to Coast

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author photo by Autotrader February 2011

Dealerships affiliated to General Motors have suffered two difficult years. Since the beginning of 2009, nearly 2,000 of them were terminated. Those left standing were forced to make more out of less with the demise of Hummer, Pontiac and Saturn. But last weekend, one GM executive finally offered some light at the end of the tunnel, announcing that the company could benefit from... more dealers.

General Motors’ North American president, Mark Reuss, made this observation at the 2011 National Automobile Dealers Association convention in San Francisco. He said that although GM has a strong presence in the mid-western and southern parts of the country, it lacks market share in the Atlantic and Pacific states, noting that the automaker’s “footprints on the coasts have been destroyed.”

Reuss and Don Johnson, GM’s vice president of U.S. sales operations, noted that models like the Buick Enclave, Chevrolet Cruze, and Chevrolet Volt are selling well in California, but could achieve even higher numbers with a stronger dealer network.

“This problem has happened over 20 years,” said Reuss. “We need to get the right dealership distribution on the coasts. We don’t have enough distribution in highly populated areas.” He was referring specifically to cities like Los Angeles and San Francisco. Just over five percent of GM’s dealers are located in California, which is home for 12 percent of the nation’s population.

However, Reuss cautioned that adding dealers won’t always be the right answer, noting that moving existing dealerships may also help regain an identity in coastal cities. “Not in all cases is it [about] adding dealers,” he said. “It could be getting the dealer that may be [there] in the right place. There’s a lot of work to do there.”

Despite talk of raising the company’s beachfront profile, Reuss said trimming was still the right move, as 90 percent of the 4,500 GM dealers are now profitable – up from 40 percent of nearly 6,200 dealers two years ago.

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The General Goes from Coast to Coast - Autotrader