General Motors has announced that it has reinstated 660 auto dealerships that it initially had tried to shut down. These dealers had applied for reinstatement. Apparently, GM has made this decision out of a desire to improve sales. The Wall Street Journal article on the move cites CEO Whitacre's desire to improve market share at the firm and to retake Ford, which sold more automobiles than GM last month.
Where does this leave GM in terms of dealerships. Here is what the Wall Street Journal reports:
"Toyota now has 1,452 dealerships in the U.S., each of which last year sold an average of 1,219 vehicles. GM has about 5,500 dealerships and sold 2.1 million vehicles last year, an average of about 376 a store."
Looking at those statistics, one has to wonder whether GM truly wants to change its ways. How can reinstating these dealers make sense given the huge disparity in autos sold per dealer cited above? Does GM truly want to have a rationalized, efficient distribution channel, or is it simply obsessed with market share? Does it matter whether it sells more vehicles than Ford? Shouldn't profit be the objective here, not market share alone?