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General Motors will cut 1,124 dealerships loose by October of 2010. The struggling automaker on the verge of bankruptcy sent letters out to the dealerships last week as it searches for ways to reduce it's current dealer network of 5,969 to just 3,600.

GM says it will not renew dealership agreements with the 1,124 companies when their contract renewal comes up in October of next year.

The dealerships being cut are considered to be poor performers and accounted for just 7 percent of GM's U.S. sales last year.

Another 470 dealerships are also scheduled to be let go as GM parts with the Hummer, Saab and Saturn brands. An additional 35 stand-alone Pontiac dealerships will also be cut.

Those dealerships not already notified aren't necessarily safe, however, as the remaining 4,300 stores is still 700 over the 3,600 cap.

The news of GM's numerous dealership closings came just one day after Chrysler announced it would drop 789 U.S. dealerships.

More: General Motors to Reduce Dealership Network by 1,124 on AutoGuide.com
 

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You might see some of those dealers switch to just selling used cars. A good number of Pontiac dealers also sell other GM brands and I dont see it affecting them too much. It seems the MEGA dealer will become a little thinner on some brands but since they offer anywhere from three brands up to five brands then I'd bet they'll still be sitting rosy. Might even see more mega dealers with the loss of some in certain areas with less competition and a braoder area to cover some might see it as an opportunity.
 
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