By Mark Kleis
Sunday, Nov 1st, 2009 @ 12:45 am
 
Chairman David Cole of the nonprofit Center for Automotive Research told federal investigators that he believed General Motor's and Chrysler's dealership cuts will reduce market share in small to mid-sized markets. Cole said, "These cuts didn't make any sense to me."



Although Cole told investigators that he has no research expertise or experience with dealerships, he was asked to come speak after he sent a letter to the Obama administration's auto task force earlier this month making a case for fewer dealership terminations.

Cole made the case that the automakers are harming their historical stronghold in rural areas and modest-sized markets with many of the terminations. Cole did agree that terminations in larger metropolitan areas were in fact justified.

In Cole's letter to the chief of the auto task force, Ron Bloom, Cole said, "The dealer is the face of the manufacturer to the average customer." Cole later told investigators, "By pulling out, GM and Chrysler are giving a beachhead to Ford and some of the imports."

Cole also said, "I would suggest that the distribution network for these manufacturers be revisited by the automotive task force."

As it currently stands Chrysler has closed 789 dealerships, and GM has plans to close 1,350 dealerships. The closures represent roughly 25% of the respective manufacturer's dealership networks.