The auto industry has always reflected the economy that supports it and most auto industry insiders agree that the recent consolidation of new car dealerships was necessary to maintain the equilibrium between supply and demand.  Unfortunately, the sensitive balancing act between new car supply and consumer demand was thrown off by the "success" of the Cash For Clunkers Program which artificially depleted new vehicle inventories.  Auto dealers had already cut back on new car orders to accommodate reduced sales volumes, and floor plan limits capped by shrinking working capital reserves limited the amount of new and used cars that dealers could keep in stock.  As a result, car dealers have not been able to timely replenish their sold inventory to maintain sales momentum and preserve profitability.  More urgently, dealers are scrambling for a way to stay ahead of fixed expenses that have already been cut to the bone.

Many automotive advertising agencies predicted that the Cash For C...