As the constant struggle of “can’t live with ’em, can’t live without ’em” continues, General Motors is billing a new voluntary program that aims to increase the amount of parts dealers carry on-site to perform same-day repairs — all in an effort to keep customers satisfied. However, some dealers have voiced concerns that the program is causing them to sit on thousands of dollars of extra parts in inventory.
The General says that its 4,400 dealerships can earn bonus money if they stock the parts GM recommends, along with buying those parts from the GM itself, rather than from wholesale distributors like AC Delco. Dealerships that can meet a 90 percent quota on both purchases and repair-order sales can max out at a 4.25 percent bonus, or $4,250 a month on $100,000 worth of parts, according to Crain’s Detroit Business.
But dealers claim that they would be sinking thousands of dollars into extra parts to meet GM’s voluntary program, with some of the parts not moving as quickly as others, thereby tying up cash that could be used for other investments or expenditures. Additionally, dealers say GM’s proposed incentive payments won’t be enough to offset the higher cost of buying more parts directly from GM over the wholesalers, which routinely sell the parts for around 10 to 20 percent less than the factory’s price.
The saga continues.