With the volume sales of automakers dropping faster than Lindsay Lohan’s sanity, it shouldn’t be a surprise to hear many dealers closing their doors. After all, they are the ones selling the cars. But things where bad in 2008 — really bad! Cars sales dropped by 18% to 13.2 million units in 2008. This led to a record 881 dealers closing their doors by the end of the year, mostly because they weren’t able to finance their inventory. The hardest hit dealers where, of course, those selling domestic cars — Ford, GM and Chrysler cars. They accounted for 80% of the 881 close downs.

But this is not all bad news for the Detroit automakers — together they hold less than 50% of the U.S. car market but hold about 75% of all dealers in the country. The closing down of these dealers will help them in their efforts to decrease and consolidate their dealer networks.

As if 2008 is not bad enough, analyst predict that a new record will be set 2009, when vehicle sales are expected to drop to 10 million units. It’s definitely not a good time to be a dealer, especially a domestic one.

Dealerships dropped like flies in 2008, with 881 retail stores resigned to history at year’s end. The steep drop in vehicle sales and difficulty finding cash to finance inventories were the main reasons for the record decline,

[Source: Reuters]