With General Motors and Chrysler planning to eliminate about 2,300 new car dealerships by next October, AutoNation’s CEO says he expects a drop-off in new car transaction prices as dealers and automakers try to clear up inventory. Though the bargains won’t be widespread, discontinued brands and dealership consolidation should result in good values for consumers.
“There will be pressure on liquidating inventory, pressure on pricing, pressure on automotive real estate,” AutoNation CEO Mike Jackson told Reuters.
Chrysler plans to drop its support of 789 dealerships, about 25 percent, on June 9, meaning the automaker will need to step up incentives to reduce its inventory – a true clearance sale.
“It’s going to be an exceptional time for consumers,” Jackson said.
The dealership closures won’t help the commercial real estate market, either. That market is down about 20 percent from a year ago – and with the size of land required to run a dealership, expect to see lots of vacant lots for a long time.
