Above, a map shows the local Chrysler dealerships scheduled to close.
Recent news of dealership closures by Chyrsler and GM have people wondering aloud how the closures will effect the already troubled journalism industry. Some have taken this news and begun detailing the corollary effects of the closures to the newspaper industry.
In the Bay Area, five dealerships are slated to close next month. It is unclear how the revenues of local publications will be changed by these five closures.
Alan Mutter, veteran journalist and blogger linked above, cites the following figures:
"Auto classified advertising in newspapers fell 29% in 2008 to a 25-year low of $2.3 billion, representing less than half of the $5 billion in car ads sold by publishers as recently as 2004.How much revenue Chrysler dealerships provide to local publication is unknown, but the losses will most certainly have an impact.
Based on data from the NADA showing how auto dealers historically have allocated their marketing budgets, it is possible to estimate that the drop in the number of dealers could reduce newspaper revenues by as much as $140 million this year.
This 6% decline would come on top of whatever additional spending cuts are undertaken by the auto dealers who remain in business. The survivors may trim their spending to cut operating expenses, boost profits or because they no longer feel they have to compete with dealers selling the same brand in their markets who have gone out of business...
Auto classified advertising in 2008 represented only 6% of the sales for the newspaper industry as a whole. Anecdotally, broadcasters say that auto advertising can represent up to 20% of the revenue for certain metro radio formats and up to 30% of sales for a metro television station."
Bay Area Radio and Television broadcasters potentially effected by the closures.
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