Many businesses have been struggling to keep up recently. Retailers have shut down, movie theaters are closing, and even once-popular grocery stores are shuttering their businesses. The automotive industry is not immune to the economic downturn either. Although things are looking up, five major dealership chains are closing, or have already closed, this year. Here is a look at the five and what led to their downfall.
1. Ford
Among the car dealerships closing this year was Buddenhagen’s Ford in New York. The dealer closed its door for the final time in mid-July. What was remarkable about this location closing was that it had been there for 90 years. It initially sold Dodge vehicles until it switched to Ford in the 1970s. Unfortunately, Buddenhagen’s Ford just suffered too many losses, both personally and professionally, to stay afloat. The original owners sold the lot to a pair of co-owners at one point. One of the new managers died after receiving a leukemia diagnosis. It was a tragic end to a long-standing part of the NY community.
In 2023, another Ford dealer made the decision to close its doors after 50 years. Hillier Ford in Escalon, California, initially opened for business in 1975. After some consideration, David Hillier made the “hard decision” to pull out of the car-selling business and call it quits on the dealership. While things are improving in the industry, some carmakers like Ford are pushing dealerships to get behind the EV movement. Ford asked dealers to opt in or out of the Model e Certified program, which allows the dealership to sell EVs but also requires a significant investment on their part. Many are finding it hard to keep up with the changes.
2. AutoCanada
AutoCanada has closed 18 locations across the United States this year. The dealership has lots in both America and Canada but decided to shut down its U.S. locations after million-dollar losses. Sales dropped massively after the CDK Global cyberattack that targeted a dealership network of sales operating systems in June 2024. During the hack, AutoCanada reported losing $33.1 million in the U.S. market. In Canada, on the other hand, it reported a net income of $2.4 million.
During an earnings call, the company’s Executive Chair, Paul Antony, spoke about the decision to close the dealerships. He said, “Spending time and energy to properly turn those stores … I don’t think makes sense given the current conditions.”
3. Lincoln
Lincoln has been open about its goal to shut down a number of its locations in the United States. In January, the company announced a buyback program in hopes of purchasing dealerships from franchise owners. The end goal for Lincoln was to minimize its footprint in the U.S. There were more than 600 car lots branded as Lincoln in 2021 and, by the end of 2024, they will have dwindled down to 450.
That said, Lincoln’s sales are on the up and up. In October, the company reported that sales were up 36%, making it the 12th consecutive month of improved sales. A spokesperson for the brand said that Lincoln will “continue to work together with our retailers to make sure we have the right representation in the top luxury markets.”
4. Stellantis
Stellantis hasn’t been seeing the best performance in the United States. Brands underneath Stellantis include Abarth, Alfa Romeo, Chrysler, Citreon, Dodge, DS Automobiles, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram, and Vauxhall. While some of these brands are popular, Stellantis’ U.S. market share dropped from 12% to 6%. There are several reasons for this. First, Stellantis has discontinued a few models without replacing them. This leaves gaps in the vehicle lineup. Dealerships also seem to have less inventory all around and the company is putting pressure on dealers to transition to selling EVs.
Benchmark Automotive is one such Stellantis dealer who decided to call it quits in 2024. The franchise owner sold Fiat, Maserati, and Alfa Romeo luxury vehicles in Alabama. Owners decided to sell the lot for $40 million in May and shutter the business. It has since been picked up by a Subaru dealership.
5. Harley Davidson
Don’t worry, the iconic motorcycle brand isn’t going out of business, but there have been some significant closures in recent years. Some of the notable dealership closings have been in Los Angeles and New York City. The reasons behind this are similar to those of car dealerships. There have been market changes and changes in competition that the company just can’t keep up with. Former employees have also spoken out about issues that may be contributing to Harley’s demise.
The Harley Davidson San Francisco flagship dealer decided to shut down after 114 years in business. A mechanic who worked at the location said that there were some significant issues with the way the place was run. Apparently, the San Fran location rarely ever sold any products and was “run like a museum.” The former employee also stated that the managers were largely to blame for the downfall of the historic Harley Davidson dealer.
The Future of the Automotive Industry
It’s easy to think that the traditional car dealership might be replaced with something like Carvana where you buy a car online, show up, and pull it out of a vending machine. However, that is far from being the future of car sales in the United States. In fact, Carvana is struggling to stay afloat as we speak. The business talked creditors into accepting a $1.3 billion reduction in debt value last year. It’s on the rebound now, but it is far from replacing traditional dealerships.
So, what is in store for the car dealerships of America? There is no doubt there will continue to be closures and changes as time goes on. The rising popularity of electric vehicles will have an impact on the market. While we have yet to see whether the economy will improve or not, it is likely more businesses will close under the current downturn as well. That said, we aren’t in danger of seeing every car lot turn into a Dunkin Donuts. Rest assured, there will still be opportunities to walk up and buy a new car for years to come.
Read More
Drew Blankenship is a former Porsche technician who writes and develops content full-time. He lives in North Carolina, where he enjoys spending time with his wife and two children. While Drew no longer gets his hands dirty modifying Porsches, he still loves motorsport and avidly watches Formula 1.