One ingredient common to the turnaround plans of each of the three domestic automakers—Ford, General Motors and Chrysler—is reducing the number of dealers. While the domestic share of the U.S. new-vehicle market has declined (from 65.7% in 2000 to 56.5% in 2006), the domestics' dealer networks have not been winnowed to match lower demand. As the dealer networks are reduced, the remaining outlets will become more profitable.
Leasing frequently makes sense for luxury vehicles because the monthly payments are lower and consumers get a lot more vehicle for their investment, according to a review of recent transaction data from U.S. dealerships collected by the Power Information Network (PIN), a division of J.D. Power and Associates. At the model level, the data also helps explain why the BMW X3 compact premium crossover is outperforming its competition, the newer Acura RDX.
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