Quote:
Originally Posted by Homeslice
Sorry, none of that explains why they would magically sell more cars by closing dealerships. Nor does having two dealerships of the same brand close together magically hurt sales.
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2 dealers close together = Two dealers competing against one another.
Two dealers competing against one another = price competition
price competition = decreased market value of each car.
end result is that it reduces profits on each car sold, it hurts the market perception of the product you are trying to sell and negatively effects the bottom line.
Chysler and GM can only compete in certain market spaces and considering their individual market positions a large heavy onerous distribution network is counterproductive.