Manufacturer, in theory, could pull out and close down the shops during financial downturns (which with US companies seems to happen every few years), leaving a bunch of owners stranded on service and spare parts (in pre-Internet days). A local dealer would be financially independent from the manufacturer, and provide needed liquidity for the car maker, the theory goes.
This made sense when automobiles were new and the infrastructure wasn't heavily established, but that's no longer the case. Now, car support infrastructure is so ubiquitous that you could wipe every dealership off the face of the planet and people would still be able to get their cars repaired. Even ignoring the independent mechanics, it's in the manufacturer's long-term interest to ensure that their customers have support for their product, since a customer who can't get their $MAKE repaired isn't going to buy another $MAKE in the future. Even if they pulled out of a market, they would almost certainly ensure some form of continuing support.
Yep, even the longevity argument is no longer valid - where are the local guys who will support my Mitsubishi and Suzuki after the respective manufacturers pulled out of the US market?
http://wardsauto.com/industry-voices/answers-faqs-about-why-...
Manufacturer, in theory, could pull out and close down the shops during financial downturns (which with US companies seems to happen every few years), leaving a bunch of owners stranded on service and spare parts (in pre-Internet days). A local dealer would be financially independent from the manufacturer, and provide needed liquidity for the car maker, the theory goes.