DEALERSHIP OVERHAUL; GM CHANGING WAY AREA RESIDENTS BUY THEIR CARS.

Byline: Dave McNary and Chris J. Parker Daily News Staff Writers

Automotive giant General Motors Corp. is buying most of its independently owned dealerships in the San Fernando and Santa Clarita valleys to create a handful of supercenters that GM officials hope will improve the company's below-average performance in one of the top car-buying markets in America.

The automaker is buying about a dozen dealerships for $50 million to $100 million combined. Some, such as Competition Chevrolet in Northridge and Valencia Pontiac, Buick Inc. in Santa Clarita, were bought by GM within the past few months. Other purchases are being negotiated.

Once purchased, the dealerships will be consolidated under one or two owners at supercenters with large inventories and fixed prices.

Saturn dealers will be excluded from the plan but all other GM makes - Buick, Cadillac, Chevrolet, GMC, Oldsmobile and Pontiac - will become part of the new centers.

Efraim Levy, an auto industry analyst with Standard & Poor's rating service, said GM's superstore consolidation is understandable in light of GM's lagging sales in the region. GM has a 13 percent share of the San Fernando Valley market compared with 20 percent statewide and 31 percent nationwide.

``When you have a 13 percent share, trying almost anything different makes sense,'' Levy said.

Anne Marie Sylvester, GM's media relations manager for dealer activities, said, ``To say that we're disappointed with our sales in the Valley is putting it mildly. Our numbers in the region are absolutely terrible.''

Rumors of the GM deals began circulating weeks ago, but local auto officials have declined to discuss the deals with Daily News reporters over the past two weeks as negotiations continue. Automotive News, an industry magazine, published an interview Monday with a GM official who discussed many aspects of GM's plan in the Valley.

Numerous local auto industry officials, who asked that their names not be used, said GM plans up to five supercenters in the Valley area, although no timetable has been set and some locations remain uncertain.

Among the expected sites:

Van Nuys: At Van Nuys and Burbank boulevards, where GM cars are sold through Century Chevrolet, Century Olds and Craig Buick. Valley Pontiac-GMC-Buick is expected to move from North Hollywood to fill out the supercenter.

The only GM nameplate not at the Van Nuys site would be Cadillac. The owner of Casa de Cadillac in nearby Sherman Oaks apparently has declined to sell, sources said.

Northridge: At Devonshire and Reseda boulevards, where GM recently bought Competition Chevrolet. GM also bought Northridge Cadillac Oldsmobile located a few miles south on Reseda Boulevard and the Buick and GMC dealerships from Walter Rueff Auto Center in San Fernando. It is expected to bring those nameplates to a new supercenter to be built on land near Competition Chevrolet.

GM is reportedly negotiating with Livingston Motor Cars to move its Pontiac dealership to Northridge, giving that supercenter every GM nameplate. The Valley would lose one Buick dealership since Livingston and Rueff sell that make.

Santa Clarita: On Creekside Road at Valencia Boulevard. GM has bought Valencia Pontiac, Buick, while Parkway Motors - which sells vehicles under the Cadillac, Oldsmobile and GMC nameplates - remains independently owned.

GM's purchase of the dealerships is the most significant move so far by a major automaker to improve its distribution network and comes amid a wave of consolidation in the industry. Traditional dealerships have been shaken up by the creation of large new car supercenters, led by H. Wayne Huizenga's Republic Industries Inc.

Republic's deals

Last week, Republic announced deals that would raise its holdings to 233 franchises in 17 states. It previously bought Magic Ford in Valencia.

GM's answer to Huizenga is ``Project 2000,'' a plan to overhaul its dealer network. In other areas of the country, GM is buying land and building GM malls with individual dealers running each store within the mall. It has half a dozen facilities open and plans to roll out another 20 next year.

The Valley plan is the first attempt by an automaker to buy out existing dealerships, consolidate them under one roof or along one stretch of sidewalk, and then turn the resulting business over to a new dealer.

GM began working on the local initiative eight months ago and should have most of the deals in place by February, according to Sylvester.

She said car prices could drop since GM will save money by combining parts, body shops, inventories, auto shipments and advertising. It also plans to offer such amenities as extended hours and computer kiosks.

``We might keep a service department open for 24 hours a day, for example,'' Sylvester said. ``There are a lot of people who might want an oil change at 8 p.m.''

Analyst Marvin Roffman of Roffman Miller Associates said Monday that he expects GM to use the San Fernando Valley as the first of many similar initiatives to build supercenters in order to exert more control over dealerships.

Most of the dealerships in the Valley area have bought into GM's ``Year 2000'' plan, but some have declined. No lawsuits have been filed to challenge the plan, according to Sylvester.

``We are not forcing anyone to participate in this if they don't want to,'' Sylvester said, adding that most GM dealers in the region have either sold their dealerships or are committed to do so. ``We're pretty comfortable with what we have now.''

Although the supercenters won't include Saturn cars, GM is borrowing heavily from its popular subsidiary as it creates the new showrooms. Customers will be able to shop from a larger-than-normal selection of cars with fixed prices while being helped by low-key salespeople.

``This is GM's first attack,'' Roffman said. ``This is a much more aggressive GM than what people have become used to.''

Under the plan, ownership of the dealerships will be transferred to GM's Motors Holding Division. GM will then pick one or two dealers to invest in the properties and run all the dealerships within the region.

Sylvester said another reason for buying the dealerships stemmed from GM's inability to revise an area's distribution system without receiving approval from all affected franchisees, under franchise laws in California.

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Photo: (color) no caption (red GM car in front of dealership window)

Map: GM ``Year 2000'' plan: GM is reportedly consolidating its dealerships to a handful of supercenters in the Valley including Northridge (1), North Hollywood (2) and Santa Clarita (3).