GM sees room to consolidate luxury dealerships

By Kevin Krolicki

SAN FRANCISCO, Feb 9 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) will drive a stepped-up consolidation of dealerships handling its three luxury brands in a bid to shore up profitability, the automaker's chief executive said on Saturday.

GM Chief Executive Rick Wagoner said the top U.S. automaker had made progress in helping to steer mergers of dealerships offering its Buick, Pontiac and GMC brands but needed to do the same now to restructure the retail network for its Cadillac, Hummer and Saab brands.

"We want to run a little harder at our luxury side," Wagoner told reporters on the sidelines of the annual convention for U.S. auto dealers.

All three Detroit-based automakers have grappled with the problem of how to reduce the number of their franchised dealers in recent years as they cut labor costs and slower-selling models in the face of slack sales and declining market share.

GM has also faced some criticism for running too many separate and partly overlapping product lines with its current stable of eight brands, including Chevrolet and Saturn.

But Wagoner said that rather than reduce the number of those brands, GM was focused on restructuring its retail sales network around them.

For example, GM has set a goal of selling 80-percent of its Buick, Pontiac and GMC vehicles through stores handling all three brands this year. Wagoner said GM was just at the beginning of a similar consolidation for its luxury brands.

"Where we have a lot of stand-alone stores for Saab and Hummer, we think it will make sense to move," he told reporters.