GM to Spend $200M on Mega Dealer Overhaul

General Motors

America’s largest automaker plans to spruce up its car dealerships on the East and West Coasts in a bid to win more sales.

Sources tell the Detroit News that General Motors (NYSE:GM) will invest $200 million in the renovations. Some showrooms will be re-located or closed under the plan, which targets dealerships in New York, New Jersey and California.

GM is facing especially intense competition from Japanese automakers like Honda (NYSE:HMC) and Toyota (NYSE:TM) in these markets. GM’s market share in California slipped to 9.9% last year, down from 11.8% in 2011. Domestic rivals Ford (NYSE:F) and Fiat‘s (PINK:FIATY) have surpassed GM’s market share in the state.

The battle for sales in California has become so important to GM that the company has created a “war room” to devise renovation and sales strategies for the state.

GM says that a fifth of its California showrooms have already been updated. The automaker has already seen an uptick in market share in Los Angeles and San Francisco. Its number of dealers in the state fell to 217 last month, down from 222 in December 2011.

In February, Ford announced a major initiative to help its dealerships finance remodeling and renovation costs.

Shares of GM fell more than 1% in Monday morning trading.

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