Here at Under the Hood, we've spent a lot of time analyzing the automotive industry. You might remember the three-part series about the economics of dealerships (Click here for Part I: Car sales, Part II: Service, and Part III: Toyota) or the entries about the problems of the Big 3.
Today, The Wall Street Journal has Page 1 profiles of two car dealerships in London, Kentucky (about 75 miles away from us here at Lowell's). The profiles echo a lot of the themes you've heard here:
- How the financial fundamentals of dealerships have been deteriorating.
- How the Big 3 have too many dealerships (look closely at the WSJ "Dealership Decline" chart).
- The relative strength of Toyota and the Japanese carmakers versus those from Detroit.
My guess: In 2009, we're going to hear a lot more Johnny Watkins-type stories of dealerships going out of business, especially in smaller towns.
[where: London, KY 40507]