General Motors and Chrysler, borrowing from Toyota's playbook, are betting they can sell more cars with fewer dealerships.
Plans announced last week to shed almost 2,000 retail outlets are designed to bolster the survivors, GM and Chrysler said. Reducing competition from stores with the same brands is supposed to allow the remainder to boost prices and profit, and to reinvest in their businesses to keep adding customers.
That echoes the strategy of Toyota in growing to second behind GM in U.S. market share. U.S. outlets for Toyota and Honda Motor Co. each averaged more than 1,100 sales in 2008, almost three times as many as GM's and Chrysler's, consulting firm Grant Thornton found.