And Yet Another Disadvantage Ailing the Big Three Relative to their Foreign-Owned Competitors

The automakers do have many profitable, first-rate dealerships nationwide, and dealers for Detroit automakers tend to score well in customer surveys.

But excess dealerships -- amounting to at least 20% nationally -- weigh down the retail network as a whole, ultimately costing sales and adding up to $4 billion annually to the automakers' costs, industry analysts and many dealers say.

The competitive disadvantage is wide for dealers, too. The independent dealerships that sell GM, Ford and Chrysler vehicles in the United States -- 15,710 in all -- sell half as many vehicles per store, on average, as top Japanese rivals, who have fewer than 4,000 retail outlets in the United States.
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Detroit's automakers are spending $436 more per vehicle to support their dealership networks than the industry average, according to CNW Marketing Research in Bandon, Ore. That translates into $3.9 billion for Detroit's automakers.

To get its dealerships back on track, GM, Ford and Chrysler must downsize 20% to 70% of their dealerships, some experts say.

And of course, downsizing dealerships doesn't come free.

But the average dealership is worth more than $2 million, so it could cost GM, Ford and Chrysler $13 billion in all to eliminate 40% of their stores and boost sales per store close to the levels of top Japanese brands.

Story here.