Do We Really Need Car Dealers?

While cruising the internet I came across this article.  I have seen on the local news, all of the hate articles about the moves from Chrysler and GM to cut down on the number of dealers they have.  A couple of points in this article is what is missing from most articles about this subject.

One, and foremost to me, is the restructuring is being done to meet the expectations of Obama’s auto task force.  So in other words, it is to comply for the bailout they are trying to get.  Which also lost in the shuffle is the fact that so far Ford is not asking for help.  More on that later.

The second point I saw, was an interesting spin that relates very closely to my opinion of newspapers.   Is the internet changing the way we buy cars?  The conclusion in the article is we still need dealers, but I am wondering if that is only a temporary thing.

The internet certainly can make a buyer more aware of trends, and can compare pricing all over the US if they want to.  With that information, they can haggle more effectively for that car, thus driving down the profit of the car.  So is all these closings just something that would have happened in time anyway?  Another bygone era along with 8 tracks?

As for Ford, I must give it to them.  They are struggling that is for sure, but the longer they hold out the better it could be for them, especially with all these dealers closing.  If I was in the market for a new car I would buy a Ford, not because I love the car, but because the bailout is tainting the other two.

Who would want to buy a car from a company that is closing dealerships, reducing brands, and in general is giving signs of being in severe distress.  Ford may be just as strapped, and if they can hold on I think they will benefit greatly as people will feel safer buying a car from a Ford dealer over one of the other guys.  Who knows, maybe in the future there will be only one of the big three left.