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258 more dealers closed this year

November 12, 2010

The number of U.S. automobile dealers is expected to fall about 3 percent this year, following a record decline in 2009, according to findings released this month by a Detroit-based consulting firm.

After 258 dealership closures in the first half of this year, there were 18, 223 dealers nationwide as of July 1, said John Frith of Urban Science, an automotive retail consulting firm that helps automakers determine the optimum number and location of dealerships.

That is on top of last year’s record 1,603 closures, a drop of 8 percent. The average decline since 1991 is 1 percent to 2 percent, Frith said.

The shrinking pool over the past 18 months largely is due to terminations by General Motors and Chrysler Group, as part of their bankruptcy restructurings last year. During the same period, about 40 dealers, mainly selling Volkswagen, BMW, Hyundai and Kia brands, opened across the country.