GM exec: Dealer network should shrink by 30 percent

David Shepardson / Detroit News Washington Bureau

WASHINGTON — General Motors Corp.’s marketing and sales chief said the Detroit automaker wants to shrink its number of dealers in urban areas by roughly 30 percent.

Mark LaNeve, GM’s vice president for marketing and sales, said the company needed to reduce its 6,800 U.S. dealers by reducing the over-concentration of dealerships in large metropolitan areas. In the last 30 years, LaNeve said the company has shrunk the number of dealers by more than half, when the company had 14,000 dealers.

Over the last two years, GM has reduced its dealerships by about 400 and it hopes to increase that rate. GM chairman and CEO Rick Wagoner said last week the company needs to increase its dealer consolidation efforts.

Some areas don’t need a reduction in dealers. As an example, the Washington-area’s four Cadillac dealers are appropriate. But the Philadelphia area has seven Cadillac dealers and should be reduced.

LaNeve confirmed at an announcement at the Washington Auto Show that GM and its former Allison Transmission unit had won orders for more than 1,700 hybrid diesel buses, more than doubling its fleet of diesel hybrid to buses to more than 2,700.

Last August, GM sold its Allison unit for $5.6 billion to two private equity firms. GM licenses the hybrid bus technology to Allison.

Ford Motor Co. announced at the show that it is building three new flex-fuel vehicles and showed off its 2009 Ford Escape and Mercury Mariner. It said those two SUVs with a new 2.5 liter engine would get a 1 mile per gallon improvement in fuel economy.

Sue Cischke, Ford’s senior vice president for sustainability, environment and safety engineering, said the company was working on plug-in hybrids aggressively, but she said she didn’t think plug-ins would account for a significant amount of the automotive fleet by 2020.