Car Dealer Insider Aug 15, 2008
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Car Dealer Insider Aug 15, 2008

If hanging tough in a down market is Plan A, what's your Plan B?

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If hanging tough in a down market is Plan A, what's your Plan B?

_News item: Larry Van Tuyl purchased Chapman Lincoln Mercury and nearby Mel Clayton Ford and combined them into a single store in Scottsdale, Arizona. Mr. Van Tuyl did not take on the Mel Clayton employees or assume any of the businesses liabilities. Source: Arizona Republic

News item: The Forbes Chevrolet dealership near Harrisburg, Pennsylvania, closed earlier this year on ten days notice. Forbes was reportedly the number two selling Chevy store in its region. The owner, George Forbes, retired. Forbes Chevrolet had about 60 employees, several of whom have worked with Forbes more than 30 years. Source: Harrisburg Patriot-News.

What do these two dealership closings have in common? The dealer/principals are out of business. Staying in business is Plan A. Selling or closing a dealership is usually Plan B for car dealers, whose entrepreneurial nature pushes them to pull out all the stops to keep their businesses open even in very difficult times.

But there is a lot more to the stories of dealership sales and closings than meets the eye. For instance, we know that Larry Van Tuyl is an informed and sophisticated buyer of car dealerships. Where he saw an opportunity for growth, the selling dealers saw only an opportunity to get out. George Forbes wanted to retire. Fair enough. But why close the dealership instead of selling it?

Plan B has to be about more than simply selling a store's assets or taking a payment from the manufacturer and then closing the franchise point.

Car Dealer insider has heard that the carmakers are putting some money into the transactions when they want a dealer to close... _(269 of 1074 words)

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