GM, Chrysler Urge Dealers to Order Cars

Two of the struggling American automakers, General Motors and Chrysler, urged their United States dealerships to order as many cars and trucks as possible in the next two months in order to help the companies prove the government they can survive. According to The Detroit News, GM and Chrysler said during a meeting at the National Automobile Dealers Association that a strong advertising campaign is expected to start soon in order to lure both dealers and customers into buying new cars.

What's interesting is that both company receive money once the vehicles leave the factory and not once buyers purchase them from the dealership. This makes negotiations with local dealers one of the most important tasks for the two automakers in their restructuring plans.

But even so, GM's and Chrysler's plans may bite the dust unexpectedly, despite the fact that dealerships said they're open to talks. According to industry experts quote by the aforementioned source, nothing has changed for consumers, as the credit crunch still exists and people are simply afraid to buy certain models due to the continuously varying price of gasoline.

Unfortunately, weak sales could only boost the number of economic recession victims and dealerships are basically in the front line of the war. Nearly 1000 Detroit 3 dealerships were closed in 2008 and approximately 2500 could close their doors this year, according to consulting firm Grant Thornton.

General Motors and Chrysler received $17.4 billion in loans from the United States Treasury and are required to forward a restructuring plan by February 17. Both companies turned to unprecedented cost-cutting measures, including temporary closures of their facilities and lowered production for US plants. While General Motors admitted it aims to sells its Swedish brand Saab, Chrysler denied rumors claiming that American company may attempt to sells certain brands such as Jeep.