More New Car Dealers Shut Down

Washington DC October 28, 2008; The AIADA newsletter reported that with credit drying up and new-vehicle sales slumping to a 25-year low, car dealerships from New Jersey to California are going out of business at an accelerating pace, threatening greater economic pain for communities around the country.

The Wall Street Journal reports that 700 new-car dealerships will close this year, up from 430 last year, and taking with them an estimated 37,100 jobs. That is a heavy blow to a key piece of the U.S. economy.

The country's 20,700 dealerships accounted for $693 billion in sales last year, or 18 percent of all retail sales. Dealership wages and salaries make up 13 percent of the nation's retail payroll.

The markets most vulnerable to dealer closings are California, which has the most dealers of any state, followed by Texas, Pennsylvania, and New York.