With over two-thirds of GM’s U.S. dealers having modernized their facilities or constructed entirely new stores as part of the Essential Brand Elements (EBE) program, many would say that the effort was an overall success. But the first iteration of the EBE program, which was launched in 2009, expires in 2016, prompting some GM dealers to face some financial uncertainty and wonder about a follow-up program, since some participating dealers have come to rely on it for their bottom line.
Under the current version of EBE, GM pays eligible dealers $300 to $700 per vehicle, depending on the brand, that they receive from the factory. To qualify for the payout, dealers must have improved an existing dealership or build a new one. But dealers must also achieve other objectives, such as completing employee training and having a digital sales strategy. Those that meet the program’s criteria receive quarterly bonuses, which can be over $1 million per year for high-volume stores. Hence, many dealership managers and owners are eager to see what the follow-up program will look like.
President of GM North America, Alan Batey, has hinted that there will be a successor to the EBE program, saying that GM’s executive dealer board, a group of four dealers representing each U.S. GM brand, is deliberating the details. But what would such a program entail when most U.S. dealers have already updated existing stores or built new ones?
According to Brad Sowers, chairman of the Chevrolet National Dealer Council and a member of GM’s executive dealer board, GM will ask dealers to invest in their businesses in other ways. Sowers, who owns Jim Butler Chevrolet in Fenton, Missouri in the St. Louis area, said that requirements for an EBE 2.0 could include high-tech digital displays and more stringent employee training requirements, especially as in-vehicle connectivity and autonomous technologies become ever more important criteria for consumers, thereby making them even more vital for dealer staff. Sowers also said that dealers will be expected to keep their new showrooms and service departments up to date.
“There won’t be anything that costs millions of dollars, but there are a lot of things we will want to do to continue improving the customer experience and driving market share,” Sowers told AutoNews. “GM is saying ‘We’ll keep you in this EBE mode because we want you guys out there knocking out the competition.'”
The GM Authority Take
Though EBE 2.0 should help dealers make continues improvements to their facilities and sales-service operations, it’s the “knocking out the competition” aspect that’s vital for GM going forward. And with revamped dealers, thanks to EBE 1.0, and a coming onslaught of all-new, highly-competitive products, GM finally has what it takes to beat the competition and earn back lost market share.