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U.S. dealership closures reach record high

by Drew Johnson

Thanks to massive dealership closures at once bankrupt General Motors and Chrysler, 2009 will mark the largest closure of United States auto dealerships -- in terms of both volume and percentage - in nearly six decades.

According the consulting firm Urban Science, 1,467 U.S. dealerships have closed their doors through October 2009, with another 200 expected to cease operations by year's end. Just 18,617 stores remain, marking a 7.3 percent decline - well above the norm of about 1 percent.

Not surprisingly, 90 percent of those store closures were GM and Chrysler outlets. GM announced plans to shutter 1,300 dealerships by October 2010, with another 350 Saturn stores now in limbo. GM was slated to sell the Saturn brand, but will now wind down the division as its sale has been terminated.

Chrysler shuttered 789 dealerships through its bankruptcy restructuring.

Despite the reduction in retail outlets, the number of sales per dealership has tumbled during 2009. Average sales per dealership tallied 660 units in 2008, but have slipped to just 551 sales per outlet in 2009. Compared to 2007, U.S. new car sales plummeted 37 percent this year.