070628 DEALERSHIP1

070628 DEALERSHIP - TON/JUN DOUG BENZ/STAFF PHOTOGRAPHER KENMORE, N.Y., June 28, 2007 - Kane Doyle Jeep is out of business Thursday afternoon.

Three local car dealers have closed their doors recently, leaving large parking lots on prime real estate and unemployed workers in their wake.

And though the regional economy is only partly to blame, the local impact is yet unclear.

“The bigger dealers are just absorbing the smaller dealers,” said Bill Ganley, professor of economics at Buffalo State College.

American car companies have traditionally been marked by several area dealerships, Ganley said. But with competition from foreign car companies who use one regional dealership and save money on staff and operations, the American system has become outdated.

Add to that lagging sales and the high price of manufacturing in the country, and it spells trouble for Chrysler, Ford and General Motors, the three traditional monsters of America’s car industry.

That’s why the so-called “Big Three” have embarked on massive consolidation campaigns to make themselves more efficient and more competitive retailers, Ganley said.

It’s also the reason both John “Butch” Skill and Jim Doyle found themselves facing a choice — accept a generous offer to close down the dealerships they owned or try to keep their head above water in an increasingly competitive marketplace.

The both chose to accept the offer.

“It’s a sale, it’s not closing,” said Doyle, who announced the sale of both of his Delaware Avenue stores in the Town of Tonawanda less than a month apart. “The offer was extremely

generous.”

Doyle sold Kane Doyle Jeep back to Daimler Chrysler in May, and Jim Doyle Ford to the Ford Motor Company in June.

Keyser Buick on Delaware Street in the City of Tonawanda was nearly one year removed from a major expansion into a nearby vacant lot when Skill announced its closure.

“It’s consolidation to have enough volume to support all the stores,” he said. “You’re cutting the pie thinner now with all the imports out there.”

Skill could have made a go of it had GM not decided to discontinue the Buick Rendezvous, Terraza and Rainier. But when he heard of that decision, he knew it was time to make a deal.

“The reason for the consolidation was basically GM wants to put the three brands (Buick, Chevrolet and Cadillac) under one roof,” he said. “That way there’s enough volume going through one store to survive. Years ago there was enough volume and enough models under (just) the Buick name to survive.”

Skill is currently running Keyser Cadillac in Williamsville, a store doing well partly because Cadillac dealers in Niagara Falls, Lockport and East Aurora have closed.

A familiar tune

National trends are a major reason for the consolidations, but that’s not to say making it in Western New York is easy. The reasons are all too familiar.

“The Buffalo market has gotten smaller, and better paying jobs have left the area,” Ganley said. “There’s a shrinking population and fewer people in the market. Plus more people are buying Toyotas than they are GM cars.”

There were about 17,000 registrations for Fords regionally about 8 years ago, Doyle said. Now that number is closer to 11,000.

“With the same number of dealers, that doesn’t really mathematically make sense,” he said.

The number of dealers is indeed decreasing, but when they take their cars and personnel, they leave the empty lots and buildings.

There are three buildings and four parking lots at the Doyle’s Ford store, and three buildings and five lots at his Jeep store. Despite the lack of practical use for the grounds, Doyle says their prime location on Delaware Avenue has made them a hot target for developers looking to turn them into retail or commercial space.

“I’ve already gotten inquiries on it,” he said. “I’m sure there’s tremendous interest because of the locations.”

Those remaining thrive

Consolidation isn’t all bad news for local dealers though. The ones who haven’t folded are seeing an increase in business, especially when they form partnerships with the closing ones for referrals. Doyle struck such a deal with Joe Cecconi’s Chrysler Complex in Niagara Falls.

“We’re seeing an influx of customers to us, but part of that was because Mr. Doyle specifically referred customers to us,” said Mike Jensen, a general sales manager for Cecconi.

Traditional advertising doesn’t work like it used to, Jensen said. Instead, Cecconi is thriving because of its emphasis on customer service and word-of-mouth referrals.

To his mind, the consolidation has worked.

“I don’t see any other Chrysler dealers going out of business, as far as I can tell,” he said. “They’re right at a reasonable level for the current marketplace.”

Contact reporter Dan Miner

at 693-1000, ext. 115.

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