Local car dealerships to remain open

Published 9:47 am Wednesday, May 20, 2009

General Motors on Friday told about 1,100 of its dealers — one in five — that they would be dropped by late next year, adding to the economic pain radiating from the beleaguered Detroit automakers to cities and towns across the country.

Including Chrysler’s decision a day earlier to eliminate a quarter of its own, about 1,900 dealerships — many pillars of their communities and heavy advertisers for local media — learned in a matter of 48 hours that they would be forced either to sell fewer brands or close altogether.

Austin dealers are not affected, including Holiday Cars, Inc. and Usem Chevrolet, according to officials for those dealers.

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The GM dealerships will be eliminated when their contracts end late next year.

As GM and Chrysler lost market share to Japanese and other overseas brands, they ended up with too many dealers. So did Ford Motor Co., which has managed to stay healthier than either of its Detroit siblings.

In the 1980s, GM, Chrysler and Ford accounted for more than 75 percent of U.S. sales, but that dropped to 48 percent last year. GM alone held nearly 51 percent of the market in 1962, but only 22 percent last year.