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And possibly a new beginning
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Posted by Ari [Email] (more from Ari) on Sat, 13 Dec 2008 11:22:16 Share Post by Email
In Reply to: Closing dealerships.. is it the begining of the end?, SylvainQc, Sat, 13 Dec 2008 07:55:16
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Call me a Pollyanna, but I'm hard pressed to assume that GM will go out of business, close all of its plants, send everyone home, and start drinking heavily. And then anyone with a GM (or Ford) will then park their car for lack of parts.

The US big 3 supply 47% or so of the US car sales, and a decent chunk in Canada and Europe. If GM and Ford go away, what about Vauxhall and Opel? If GM and Ford just stopped selling cars, there would be a huge unmet demand. Yes, car sales are down, but not by 50%. Toyota and Honda (and others) can't just turn up the wick on their factories - they can only produce so many at a time. So GM declares bankruptcy, and re-organizes. Maybe smaller, but reorganizes. That sounds like an opportunity.

And then there will be literally millions of cars out there in North America (not to mention Europe, again) that need parts and service. Folks aren't going to be dumping their 2 year old car to buy a new Nissan - not in this economy. Once again, an opportunity. Suppliers will rush in to supply a vast market for folks keeping their cars alive.

Will getting parts be a bit harder? Probably. But if there are companies that sell 'new' parts for 1968 Mustangs, of which there can't be that many left, what market will there be for cars that have sold tens of thousands a year for the past two decades? Yes, it'll be easier to find Buick parts than Saab parts, but there will be folks to do it. If there is a demand, a supply will soon follow.

And when the dealers close, those mechanics will then start opening up independent shops - they've got to work, too. And there will be lots of cars needing service. Again, a troubled time because it'll be hard to get loans to start a business, but after a bit they'll be there - and a supply chain to feed them.




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