How does reducing number of GM dealerships help GM?

[Earth Needs Oil]

kursty : lower prices = more sales. GM's profit is the same even if the dealer gives the car away for free.
Alarm : Most dealerships are not owned by GM -- they are separate private concerns.
Wes : Deleaships are not GM overhead. Dealerships pay for the financing of cars sitting on their lots unsold.

 

[Wes]

They have a surplus of unsold vehicles sitting out there taking up space reducing the number of dealerships will do two things

1. Cut unneeded overhead

2. Create the illusion of scarcity

Production with out sales is overhead, allot of those vehicles are on consignment to the dealerships.

 

[Alarmist for Hire]

Well..has it occurred to you that the value of a dealership depends on its sales revenue MINUS its costs? If the dealership costs GM more than the revenue GM derives from the dealership, then GM will lose money on the dealership, regardless of whether non-GM people own the dealership. That's how.

 

[Wolverine]

they need more sales, i'm not sure the move will hurt or help GM sales, my initial reaction is it hurts their sales

 

[Wolverine]

they need more sales, i'm not sure the move will hurt or help GM sales, my initial reaction is it hurts their sales