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Area GM dealers brace for changes

General Motors' overhaul plan will have an impact on Buffalo Niagara showrooms.

GM said Tuesday it will phase out its Saturn brand over the next few years, but will consider offers to spin off or sell the brand's distribution network. The automaker will decide by March 31 whether to sell or phase out Hummer. Pontiac will endure as a "niche brand" with fewer new products, and GM is seeking buyers for Saab.

GM also projected it would reduce its U.S. dealer count from 6,246 in 2008 to 4,700 by 2012, and to 4,100 by 2014. "Most of this reduction will take place in metro and suburban markets where dealership overcapacity is most prevalent," GM said.

There are nine Pontiac dealerships in Erie and Niagara counties. The region is also home to two Saturn dealerships, both owned by West Herr Automotive Group.

Steve Cappellino has the region's only Hummer dealership, in Clarence. He and Checkpoint Foreign Car Sales in the Town of Tonawanda are the area's only Saab dealers.

GM's chief executive officer, Rick Wagoner, said Saturn will remain in operation through 2011. He said the automaker would entertain offers to spin off or sell Saturn distribution network to dealers or investors.

"If a spin-off or sale does not occur, GM plans to phase out the Saturn brand at the end of the current product lifecycle," GM said.

Scott Bieler, president of West Herr Automotive Group, said he was encouraged that GM was planning to keep Saturn going through 2011.

"I'm encouraged that they're giving this brand this much time," Bieler said, adding he believes "a lot can happen between now and 2011."

Bieler said he believes Saturn has potential to carry on apart from GM, based on its image, product quality and its network of roughly 400 stores.

Saturn's Orchard Park dealership opened in 1992 and the Clarence dealership debuted in 1994. Bieler said they are both in the top 10 among Saturn outlets in the country.

The Cappellino family was awarded the exclusive local Hummer franchise in 2001 and later opened a standalone dealership for it. Steve Cappellino could not be reached to comment Tuesday night.

Wagoner said GM is still talking to potential buyers about Hummer but expects to make a decision by the end of the first quarter. GM said it expects a final resolution related to Hummer no later than 2010.

The automaker also said it had conducted a global review of Saab and has offered it for sale.

"Given the urgency of stemming sizable cash demands associated with Saab operations, GM is requesting Swedish government support prior to any sale," the company said.

Pontiac recorded sales of 3,166 new retail units in Buffalo Niagara last year, while Saturn sold 3,152, according to the Niagara Frontier Automobile Dealers Association. Hummer sold 228 units, though figures for one month were not available. And the NFADA reported 183 Saabs sold, but the figures were from only one of the two area dealers.

To put those sales totals in perspective, leading brands like Ford and Toyota sold about 9,600 and 7,500 units, respectively, in the region last year, according to NFADA data. (Figures for Chevrolet were not released.)

e-mail: mglynn@buffnews.com

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