The Fall of the Auto Industry?

By 2009 there are estimated to be only 19,700 auto dealerships left in the United States. This is compared to the 50,00 that were in operation during the 1940s. An even more telling number is the 747,000 cars sold in November; seems like a lot? Not when compared to the 1.18 million that were sold by this time last year. This report comes courtesy of Autodata and is a frightening look at the American auto industry. 

In Miama, Florida a sign on car dealership read "buy one, get two!" This is desperation as never before seen in the auto industry. Car dealerships continue to to report record low sales level, and it seems the only hope lies in the proposed government bailout of the big three auto companies; Chrysler, Ford, and GM. Ali Ahmed, sales manager at Rob Lambdin's University Dodge in Miami, was quoted as saying, "The first thing people think when they walk in is, 'it's a fake ad. It's a normal car dealer ad. It's a gimmick". The sad fact is that it is not. The only catch is that you must buy a Dodge truck at retail price before you can receive your second vehicle at $3,000 dollars in tax, tag and dealership fees.

With auto sales at an fifteen-year low, 700 dealerships have had to shut down since the beginning of the year, and that number is expected to hit 900 by the end of the year. Annette Sykora, the chairwoman of the National Automobile Dealers Association, stated that dealers have had to cut personnel and expenses. She has had to cut staff by almost twenty percent at her dealerships. 

Sykora discussed with the school superintendent of schools in Slaton, Texas where some of her dealerships are located, and discussed what would happen if those dealerships were to shut down. She stated that "the loss of tax revenue would would force them to cut programs and teachers". Not only this but families who lost their jobs would have to leave town in search of other work, which would only further hurt the towns economy. 

This domino effect is something that not many people may relate with a dealership closing. The economy of a town would be seriously damaged, as not only would families leave, but teachers salaries would be cut, local media would take a hit as dealerships are a prime source of advertising. These are only a few examples of how closing dealership impact this particular town, imagine if towns all over the nation began to experience these consequences.