Chrysler is closing a quarter of its dealers in a matter of weeks, a strategy that might help save the company but will wipe out thousands of jobs and a lot of local business owners.
General Motors Corp. announced today that they are closing 1,200 dealerships in the next few weeks.
A lot has been made about the impact of the closings of Chrysler and GM dealerships on local economies, but not a lot has been said about the impact on local media.
Local media - including local TV, radio, newspapers and outdoor - will really feel the pinch. The average car dealer spends about $341,000 on advertising. Typically, about 75% of that budget will be allocated among broadcast, print, online and outdoor media.
During good times, automotive advertising will make up about 10% to 15% of local advertising spending. This includes both spending by the individual dealers and by dealer groups. The impact on national advertising will be minimal, but the impact on local markets will be felt for many years.