The launch of FactoryPreOwnedCollection.com could have went a tad smoother for General Motors. The factory pre-owned vehicle sales site aims to sell previous rental and GM company cars directly to consumers, and dealers haven’t exactly taken a liking to it.
According to a new report from Automotive News, only 1-in-4 GM dealers have signed up for the program, which allows consumers to purchase a vehicle via the Shop-Click-Drive program, and take delivery through a local GM dealership. The California New Car Dealers Association has penned a letter to GM expressing its discern with the factory pre-owned collection, stating it breaks California brokering laws and is unfair to dealers.
“We have had our attorneys review the program and they have raised various legal issues that need to be addressed by GM,” said the letter, signed by Brian Maas, the association’s president
The letter states the program gives GM an unfair competitive advantage of its dealers, and states the automaker is engaged in auto brokering, in which GM would need a California license. The letter goes on to state the Kelley Blue Book prices associated with the vehicles listed are “unrealistic” and “therefore misleading.”
“There are a whole host of issues relative to the Pre-Owned Collection program, and it’s not clear to us, based on what we can surmise from the program itself, whether [GM has] thought about these issues,” Maas told AN.
GM has already responded to the initial criticisms. Brian Sweeney, Chevrolet U.S. Vice President, acknowledged the ho-hum launch, but stated dealers are really on the automaker’s side.
“[The program] probably came on the dealers a little quickly” but he said the Chevrolet National Dealer Council supports it. “They understand it,” he said.
“It’s a lead source,” Sweeney said. There also was “noise” from dealers when GM’s Shop-Click-Drive online buying program started in late 2013, he added.
“It’s the unknown. They’re not used to it,” he said. “They’re used to either buying on the online auction or going through the physical auction. And now there’s another portal.”
The website is “an opportunity to really just connect the customer back to the dealer,” and “it moves some of our product quickly through the system,” Sweeney concluded.