GM Generali

RBC Capital Markets said Friday that the bankruptcies of General Motors Corp. (GMGMQ) and Chrysler LLC will produce far fewer car-dealership closings than expected as the dealers adjust by selling other car brands.

The number will likely be closer to 2% of the new-car dealer base than the 15% assumed by the investment community, said RBC hardline retail analyst Scot Ciccarelli, citing an RBC survey.

The auto makers have said they need to shrink their dealer networks to cut costs, improve the image of their brands and ultimately boost sales. The plans were made under the guidance of President Obama's auto task force.

The dealerships' looming demise has prompted lawmakers to step up pressure on GM and Chrysler to pull back on the planned closings, with some arguing that neither the White House nor the companies themselves had offered any economic rationale for the closing of the dealerships.

There were approximately 20,700 new car dealers in the U.S. at the end of last year. GM and Chrysler have said they intend to revoke the distribution licenses of some 2,400 and 789 dealerships, respectively. That would shrink their dealer networks by 42% and 25%.

RBC's survey of 10% of the Chrysler dealers who had their franchise revoked found that only 12% expected to fully close their doors. Almost 50% already had other new-car franchises, so as they stop selling Chrysler products they'll still have other brands to offer. Another third expect to convert to used-car dealerships.

Ciccarelli said a decrease in the number of expected new-car dealership closings is unfortunate news for used-car superstore chain CarMax Inc. (KMX), other new-car purveyors and even auto-parts retailers, who stand to benefit from the dealerships' disappearance.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com