Juneau dealer casts hopes on Chevrolet

Business to exchange its GMC franchise for Chevy

Posted: Sunday, December 28, 2008

While the Big Three looked for a government bailout, Juneau's Mendenhall Auto Center was negotiating with General Motors to start selling Chevrolets.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

Counterintuitive?

"There are a lot of people in this town who frankly just love Chevrolets," said Steve Allwine, who co-owns Mendenhall Auto with his wife, Karla.

The car dealership isn't adding a new franchise; it's exchanging its GMC franchise for a Chevy one. Mendenhall Auto also sells Chrysler and Dodge, Subaru, Honda and Toyota cars and trucks.

Allwine says General Motors approached him about three months ago and asked if he wanted to exchange it.

"The thing they get the most impact and exposure out of is Chevrolet products," he said.

The offer comes just as GM is cutting its dealer network by 1,750 to 4,700 dealerships, according to auto analysts CSM Worldwide.

Allwine wouldn't say whether he got the franchise at a discount, considering the manufacturers' problems. Instead, he detailed the benefits: He'd still be able to service the GMC trucks he has already sold, and he'd be able to get both cars and trucks from GM that way. And Chevrolet is GM's "flagship brand," said Allwine.

"In that regard it made sense," he says.

A lot has happened to GM and the rest of the auto industry since then, none of it positive. Car sales have fallen worldwide. Automakers both domestic and foreign are cutting production significantly. The Big Three ponder bankruptcy, and last week the president approved for General Motors and Chrysler $17.4 billion in loans to avoid it.

But Allwine says he never considered pulling out as the bad news came down.

Instead, he saw the exchange as an opportunity to fill a niche. Two Chevrolet dealerships have started here and gone out of business in the last two decades, he said. He doesn't fault the brand.

Talk of recession and the automobile industry's problems are overwrought, if you ask Allwine. That affects him.

"There's been so much flap. Nationwide, it's keeping people out of dealerships," he said. "I think we need to turn the TV off just a little bit."

This time of year is always slow compared to the spring, he said. In the next few weeks, Allwine will transition out the GMC trucks, putting them on sale, while the Chevys start to arrive.

• Contact reporter Kate Golden at 523-2276 or kate.golden@juneauempire.com.



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