Many minority dealers operate in cramped downtown locations that are less desirable than the spacious suburban auto malls that are now popular, said Mr. Lester and other dealers. Urban franchises typically draw fewer shoppers and carry less inventory for customers to choose among. Both factors tend to limit sales.

Minority dealers often don't own the land beneath their showrooms, so the monthly rent adds to their costs, Mr. Lester said. And since many borrowed money to get into the business, they sometimes have more debt than family run dealerships that have been in business for decades. *

*Alex P. Kellogg, "Minority Dealers Hit Hard by Auto Crisis," Wall Street Journal, 14 May 2009.