Ford Motor Co. (NYSE: F), which is reconfiguring plants from producing unpopular trucks and SUVs to fuel-efficient passenger cars, will now be trimming its nationwide automobile dealerships as sales continue to lose steam. High fuel prices and shifting consumer sentiment towards smaller cars are only some of the reasons for the sales decline.Ford executives believe that more Ford dealerships (along with Ford brands Mercury and Lincoln) will have to consolidate to survive. Ford is right -- there is no way a huge, overwhelming national network of dealers can exist when sales don't. Expect dealers to start amalgamating as Ford's Way Forward plan continues taking longer than expected.
2007 stats tell the tale: Four thousand Ford, Lincoln and Mercury dealers sold an average of 590 vehicles in 2007. Toyota Motor Co.'s (NYSE: TM) 1,400 dealers in the U.S. sold 1,766 vehicles in 2007. Quite the contrast. Ford has managed to make about 400 weaker dealers combine with stronger ones since initiating a program to do just that in 2005. Looks like incentives to speed up profitable dealer concentrations will have to become much sweeter as sales continue to flop as badly as a corner lemonade stand in winter.
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