Dealers take bankruptcy filing in stride

When General Motors filed Monday for bankruptcy, an era in the new car business came to an end, observers say. Still, the car dealership business has been evolving for years, slowly in some respects and quickly in others.

In years past, local residents owned most new car dealerships, knew each other by name and regularly swapped jokes, said Jim Marsh, owner of the similarly named Chrysler dealership.

Today, out-of-town corporations own many dealerships in the Las Vegas area, and their managers switch jobs frequently.

"For years, hardly any franchises changed hands," Marsh said. In the past six months, he has witnessed the biggest change in dealership ownership that he has seen in more than 30 years in the Southern Nevada new car business.

Americans have been gradually switching from U.S. brands to foreign brands over the years, however, he said.

Southern Nevadans saw GM successfully counter foreign competition for a while with the Saturn, a U.S. product sold at the same price to everyone without haggling.

Saturn of West Sahara began selling to Nevadans in 1990, and Las Vegans were so excited that they were willing to go on waiting lists for the vehicle, observers said.

The once proud brand is starting to look like an orphan as GM seeks to sell it. The Findlay chain wonders whether its future includes Saturn.

The company said Friday that it was consolidating two Saturn dealerships at 310 N. Gibson Road and converting the Saturn of West Sahara facility at 5325 W. Sahara Ave. to a Kia store.

"We will re-evaluate our Saturn dealership once GM completes the sale of Saturn and we have a clearer picture of the volume of Saturn business we can expect," Findlay Chief Financial Officer Tyler Corder said in a statement.

The number of customers who only buy American cars is dwindling, Marsh said.

Had Chrysler not decided to terminate Jim Marsh's franchise, he said, he would have continued selling Chryslers and Jeeps. But he wanted to sell foreign cars as well.

"We've still got a glimmer of hope (for keeping Chrysler)," Marsh said, but he has built his business plan around selling Kia, Mitsubishi, Suzuki and the Mahindra, a car from India.

Car dealers also have been forced to restructure their businesses as total new car sales plunged in the past couple of years.

At Findlay Chevrolet, "the number of vehicles we have sold has shrunk," said Justin Findlay, general manager of the family-owned business. As a result, he has reduced staff and marketing expenses. The dealership can make a profit now on lower sales volume, Findlay said.

Other dealers face similar issues. "Everyone has to re-evaluate their goals. The big pie has just shrunk quite a bit," Findlay said.

However, "I don't see a drastic change in the dealership landscape," he said. Nor does he expect a big change in the number of new car dealers in Southern Nevada.

Chrysler said last month that it was terminating four dealerships in the Las Vegas area, including Integrity Chrysler, which already had announced plans to close.

None of the 15 GM new car dealers in Southern Nevada received termination notices in mid-May, according to industry sources. However, Greg Heinrich, co-chairman of the Chevrolet National Dealership Council, said he does not know whether any Southern Nevada GM dealers will get termination notices today.

About 200 additional GM dealers are expected to be terminated, but GM is not expected to disclose the names of those dealers, said Heinrich, president of Fairway Chevrolet, Henderson Chevrolet and the Pahrump Valley Auto Mall.

Steve Giger, a former manager for Fletcher Jones, Findlay and Towbin dealerships in Las Vegas for 26 years, said the public's interest in the corporate structure of automakers will fade as the news media focus on other topics.

"For the public, it's pretty much going to be business as usual," Giger said.

"If the government people have too much influence (in automaking), you can really see some strange happenings. They are bean counters" who don't understand how advertising drives profits, he said.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.