UPDATED! GOOD CHEVROLET CLOSES
According to fellowblogger John Knox White, Good Chevrolet, following a dispute with Chevy’s financing company, has closed its doors. He’s got the quick-and-dirty on it right here. The Journal’s Peter Hegarty has more, here.
We haven’t got hold of Good’s John Buono, but we checked in with our auto finance expert (thanks, BM!), who explained to us that the dealership’s financing company – their banker, if you will – could ask a dealership to pay down its inventory (to pay the financing company what it owes for the cars) or make other changes to its business plan because it’s just not selling enough cars each month.
Typically, he said, dealerships like to turn over their inventory in 60 to 90 days; anything later than that and they get nervous, because their interest payments on the cars sitting on their lot begin to mount. And cars are not a high-margin business, but a volume business (dealerships usually earn much of their income from service on the cars they sell).
Our expert also explained that the crappy economy, among other things, has pushed auto sales to an all-time low. (Hegarty’s story notes that two other Bay Area dealerships have also just announced they are closing their doors.)
As JKW pointed out, this is bad, bad news for the city. He says that Good is one of Alameda’s top 10 sales tax generators.
More to come if there’s more to come …