Fewer car dealers, higher dealer sales, how about the customer

A Wall Street Journal article (February 23, 2011) describes growth in demand at car dealerships – the result of the auto recovery but also the elimination of about 20 % of the dealers the last few years and elimination of some model lines by OEMs.  With higher sales per dealership and models, dealers can spend on more overhead to assist customers.  The earlier regime with an excess of dealerships caused brutal price competition, which had to be compensated by tradeoffs in design, lower margins or poor customer service. But is the supply chain now moving to a new equilibrium where customers are better off ?  Will the new supply chain enable US OEMs to compete more effectively with Japanese and Korean automakers whose dealership volumes were more balanced ?

About aviyer2010

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