According to Chevrolet small car director Margaret Brooks, the goal is to give buyers the ability to immediately measure the Cruze against segment leaders such as the Toyota Corolla and Honda Civic.

The comparison, part of GM’s May The Best Car Win philosophy and marketing campaign, is reminiscent of the Test Drive Studio initiative established by The General earlier in the year. At this point, it is unclear how the two efforts will coexist, if at all.

Ad Blitz

What’s more, Chevrolet is planning for a major advertising and marketing blitz for the Cruze, details of which will be available shortly. Chevrolet didn’t comment on the size and budget of the campaign.

Cruze-In

Already on sale in 60 countries all over the world, the Cruze is GM’s first truly global vehicle that was engineered from the ground up to be built and sold all over the world. It features more shoulder room than both the Corolla and Civic and has a truly awesome exterior coupled with a modern and practical interior.

While the Cruze has yet to undergo U.S. crash test ratings, the Delta II-based Chevy was awarded top honors in European front- and side-crash test ratings. It contains ten airbags and The General even went the extra mile to include sound-deadening glass – a feature that’s unheard of in the mainstream compact segment. With all that in mind – the Cruze will be available in the regular Chevrolet trim levels as well as two special models – the RS and Eco. It starts at a mere $16,995 in the U.S. – including destination. What more do you need (or want)?

And for those who have not yet seen the upcoming Cruze hatchback, things will only get better for the Cruze line!

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Hello *****

Thank you for your online request, as you know the Volt is going to be a very limited production vehicle for the first 2-3 years. Demand is going to far exceed supply for this vehicle, initially our asking price for the Volt is going to be MSRP plus $20,000, we are expecting only receive 9 Volts all of next year.

I will keep you in my customer base for when the Volt comes out and I will contact you with any information as I receive it. We are taking orders right now for the Volt, if you would like more information, please let me know and I will be more than happy to help you. Thank you.

***** *****, Internet Specialist
******* Chevrolet
********, CA

Though it should be noted that the dealer in question sent the letter just before The General’s announcement of a 50 percent production increase for the Volt for 2011, it doesn’t change the fact that GM has been discouraging this type of price gouging from the get-go:

“We also aren’t expecting our dealers to overcharge anyone for this vehicle, either, and will monitor the situation closely when we launch… we’ll be paying close attention when the vehicle launches and do our best to strongly discourage this kind of behavior, as we always do with any GM-branded vehicle,” said an official GM spokesperson.

So far, there hasn’t been any word on whether the dealer has been dealt with or if they are a part of the Ft. Lauderdale-based AutoNation dealer network, who had one or two things to say about any dealer with the gull to do this. We’ll be following this one very closely.

Before GM’s decision to decrease its dealer count by nearly 2,000 stores, Rally carried The General’s Chevrolet, Cadillac, Buick, Pontiac, and GMC brands. However, the arbiter in Rally’s case decided to give its Chevy franchise to a nearby Saturn store, allowing Rally to continue selling the Cadillac, Buick, and GMC brands.

According to Rally, the arbiter erred in splitting the franchises: under the dealer arbitration law passed by Congress last year, the judge should have either kept the whole dealership intact or ordered the entire operation to be closed completely.

As of this writing, Rally Auto Group is the only GM dealer to sue in the aftermath of the dealer arbitration process. You can bet we’ll be following this one closely.

[Source: Automotive News (sub. req.) via Autoblog]

New And Improved Facilities

GM’s revamped stores are participating in a major facilities upgrade program in order to align with GM’s new dealer branding guidelines. More than 300 upgrades have already been completed and 1,000 projects are scheduled through the end of 2010.

The initiative, which began in October 2009, is accelerating – with nearly 100 dealerships upgrading their stores every month. Major elements of the image upgrades include work areas with power outlets for phones and portable computers, Wi-Fi access, and a café with refreshments.

GM is also updating or installing new signs at Chevrolet, Buick, GMC, and Cadillac dealerships across the country. The signs include a contemporary design and reflect the current image guidelines for each of the four core brands.

“Customers throughout the country will be seeing a new look at the Chevrolet, Buick, GMC and Cadillac dealerships in their communities,” said President of GM North America Mark Reuss. “Putting our new dealer network in place is one of the most important elements in the rebirth of GM.”

Smaller But Still The Biggest

With 4,500 dealerships, GM’s dealer network is 25 percent smaller than that of early 2009, which was consisted of 6,049 stores. Compared to the previous network that sold 87 brand combinations, the new dealer body has dropped that number down to 15. This decreases complexity, provides greater operating efficiencies, and increased dealer throughput and profitability – all while providing existing and potential GM customers choice and convenience.

“Our dealers are the face of GM to our customers and valued members of the communities where they do business across America,” said Reuss. “We’re confident our dealer network will be the best in the business.  It will be the right size with the right dealers to give our customers great service during and after the purchase.”

However, we must point out that even though GM has a reduced dealer count, our favorite automaker still faces similar potential problems when it did with 6,000+ dealerships. A bloated dealer network encourages cross shopping, making GM dealers in the same area/community compete for the same customer. Traditionally, this has lead to lower sale prices, killing dealer profits and resulting in lower vehicle resale values. What’s more, decreased profits rob dealers of other opportunities, such as facility upgrades and employee training programs, to name a few.

Higher Emphasis On Customer Care

Even though General Motors dealers historically rank near the top or above the industry average for customer service and sales satisfaction by third-party sources, Reuss noted that the new dealer network would be even more focused on being an industry leader in customer care.

The Backstory

GM offered wind-down agreements to 2,064 Chevy, Buick, GMC, and Cadillac dealers that it determined needed to transition one or more of those brands from the network by October 31, 2001 (coinciding with the running out of the dealer agreement). However, The General hit a legislative roadblock due to federal law passed in December of 2009.

Under the new law, General Motors dealers filed 1,176 arbitration cases with the American Arbitration Association to have their dealer agreements reinstated. Out of those 1,176, only 62 arbitration cases were completed.

GM sent out 702 Letters of Intent to involved dealers which granted them the permission to conduct normal operations as soon as they comply with the terms of the letter. GM has reached 408 individual resolutions with other dealers, most of which call for the dealer to continue the wind down process.

“We spent a considerable amount of time and effort to work toward a mutually agreeable resolution with our dealers,” Reuss said.  “We’re pleased that we could complete this process in what we believe is an effective and efficient manner.

View Press Release

AutoNation HQ In Fort Lauderdale, Florida

It looks like we’re not the only ones excited about the upcoming Chevy Volt: Chevrolet dealers are also waiting in great anticipation for the E-REV’s arrival later this year. But when the Volt hits dealer lots, it may not be all butterflies and roses, since some Chevrolet dealers may be planning to gouge Volt buyers by increasing the purchase price of the vehicle.

A responsible dealer chain, however, is putting the kibosh on the price gouging ordeal: AutoNation, the largest new automotive dealer group in the United States with 230 dealerships in 15 states, has issued an ultimatum to its Chevrolet dealers. Speaking with Edmunds, AutoNation’s head of communications and public policy, Marc Cannon, said that AutoNation has sent its 27 Chevy dealers a notice regarding Volt pricing.

According to Cannon, the maximum price for which an AutoNation Chevrolet dealer will be able to sell a Volt will be the equivalent of the vehicle’s MSRP plus any dealer-installed options. Just in case a dealer or its employee decides to take its chances with the Volt’s price and violate the policy in question, the employee(s) in question will be terminated.

The GM Authority Take

Is this a bit extreme? Maybe. But with such tremendous demand for the Volt, consumers – especially early adopters – will pay almost anything to get their hands on the bow tie-wearin’ EREV. This is something that was eloquently illustrated by GM Authority’s own Hylton Jorssen in his article here.

W think AutoNation is on the right track here. Perhaps it can be something General Motors itself could look into and apply to all Volt certified dealers. The terms of service would read something like, “Increase the MSRP of the Chevrolet Volt, lose your Volt certification.” It can be as simple as that. No “legaleze” needed.

[Source: Green Car Advisor]

“Chevrolet Dealer allows us to spend less time behind our desks and more time on the showroom floor with our customers,” said Joel Smith, retail operations manager at Hendrick Chevrolet in Cary, N.C., where the pilot of Chevrolet Dealer began July 9. “Our customers have been wowed when we are able to show them video and help them choose options, all on the iPhone.”

Chevrolet Dealer is being tested in select Chevrolet dealers and will be released across the nation later in the fall. This makes GM’s bow tie brand the first automaker to pilot a sales app for Apple’s ecosystem of mobile devices.

Whether the app will be available to the general public and whether it will function outside the United States is something we don’t know at this point – and GM didn’t respond to our request for such info at time of publication. We will update this article as soon as we hear back from the fine folks at The General.

View Press Release

Dealers that have been Volt certified are also required to keep a Volt on their lot for potential customers to test drive. Volt Certified Dealers can be found at http://getmyvolt.com.

“About 90 percent of our Chevrolet dealers in launch markets to date have requested to become participating Volt dealers,” said Tony DiSalle, Chevrolet Volt product marketing director. “The response exceeded expectations given the extensive training requirements. There’s obviously a lot of enthusiasm for the Volt’s arrival later this year.”

View Press Release

Not Customers?

So if GM dealerships are not GM’s customers, what are they? Like the thousands of other companies with which GM builds relationships in order to produce and market the company’s vehicles, dealerships should be treated as suppliers: they are suppliers of marketing, suppliers of vehicle service, and suppliers of sales service. In simple terms, GM dealerships provide a service to GM and multiple services – along with the ability to buy a product – to the consumer. If anything, the dealerships should be kissing GM’s butt (like some suppliers do) since it’s GM that allows them to earn a living.

It’s no secret that even after the failure and rebuilding of GM, it’s still business as usual at some dealerships. For example, it’s still common for dealers to employ sales reps who know less about the product than the customer walking through the door.

The Informed Customer

This one issue alone is reason enough for customers to dread the dealership experience. Consumers now see how much gobble-dee-gook a poorly educated sales rep is dishing them when they already know everything the salesman knows and then some. Problem is, the sales reps don’t realize what is occurring in this scenario and end up burying themselves – along with any transaction or sale.

Over the last 20 years, the vehicle buying process of the American consumer has changed dramatically. How? We are now able to sit down in the comfort of our own homes and do our own research on our own time. We are able to make up our minds about a vehicle to the point where the only reason for visiting a dealership is for a quick test drive. But even the lack of a test drive will not prevent people from ordering vehicles these days! GM had almost 12,000 Camaro orders before the first car was even built yet. That number would have been even higher had many consumers been able to bypass the dealer experience.

Shady Dealer Practices

Less known (even to GM brass) are the more unethical practices that occur in the trade surrounding the sale of The General’s vehicles. For example, did you know that even though you custom ordered a vehicle to your specifications and put down a deposit, the dealer is under no obligation to sell it to you? In fact, once the car arrives at the dealership, the dealer is free to ask even more for the vehicle, citing “market conditions” as the reason for spiking the price. Keep in mind that this is despite the fact that you have a written contract (fine print is a bitch).

Last year, I was contacted by someone who had ordered a 2010 Camaro in September of 2008. He ordered it exactly like he wanted it and spent the entire winter dreaming about the shiny new Camaro that would be in his driveway shortly after the pony car had begun production in April 2009. Once his Camaro arrived at the dealership, the salesman called him and told him to “come on over to sign the papers, the car is here!” How excited he was – he grabbed his particulars and headed down to the dealership. Once there, he was brought into the office and was told that the car would now be $3,000 more due to “market conditions”. It was $3,000 that he had not budgeted for and could not come up with. In the end, the deal went south and the car was put on the lot with a price above MSRP.

It’s All About The Long Term

What is the result of this scenario? The dealer may have received a short term spike in profit – someone most likely ended up paying over sticker; or the dealer ended up with a lost sale that our would-be owner does not know about. For GM though, both scenarios resulted in one less customer for the next 10 years. If that customer turned around and bought a Mustang, his next car would most likely be a Ford as well, and the individual may do nothing but curse the GM name to anyone who would listen. That’s the unfortunate part, the dealer is the face of GM and rarely does the customer comprehend the separation of the two.

The Solution

So how can GM face the challenge of ensuring that good dealerships are properly recognized?

First, they need to change internal and dealer cultures so that all clearly understand who works for who. This simple change will allow GM employees that work in sales to determine better strategies and programs that focus on the consumer that – at the same time – also send a message to dealerships about GM’s expectations.

Second, these new strategies must reward dealerships that perform well and penalize those that perform poorly. The “Turn-and-Earn” program is a good start, but I don’t think it goes far enough on the penalization front. The CSI program has some merit, except for being highly inaccurate due to only measuring those who purchased a car while neglecting those who tried to purchase but left in dismay (huge gap).

Even today, GM still has about 1,500 dealerships more than it really needs, so stripping someone’s franchise away should certainly be a possible outcome of poor performance.

GM must also better educate the consumer so that he understand that poor service is not the normal practice of GM dealers and that certain practices (legal or not) are not condoned by GM. Even GM Authority has received numerous complaints via our Contact page about their dealer experience.

Consumers understand that they have a choice in picking the manufacturer for their hard earned money, but GM should also make sure the consumer understands that there is a choice within the GM dealer network. Do you know which GM dealerships have the most awards and the reasons behind such awards? You don’t? Neither do I, but it’s GM’s duty to inform you before you decide to walk into a dealership. There’s only one customer – and that customer, dear reader, is you.

1,160 dealers took GM up on the offer. Out of those 1,160, 661 were reinstated and the rest were given the ability to discuss compensation or reinstatement with GM in private. Fast forward to today: Mark Reuss, President of GM North America, said that GM will have nearly 5,000 dealers in the U.S. by the end of July. A GM spokesperson however, said that a final tally of GM dealers will not be announced until the arbitration process comes to a close.

This is 900 dealers more than GM originally planned for as part of its restructuring – something that may come back to haunt The General in the long run. Afterall, Toyota makes do with nearly 1,000 dealers less than GM’s post-bankruptcy dealer count but sells nearly as many vehicles.

[Source: Detroit Free Press]

Auto Show Test Drives

The first program takes advantage of GM’s presence at some 30 auto shows around the U.S., and will coincide with the annual events. It will allow show attendees to test drive GM vehicles against those of competitors.

According to Steve Tihanyl, GM general director for marketing services, alliances, and branded entertainment, “What we are trying to do is leverage the period of the auto show to create this experience.” In fact, “One thing we know about auto shows is a lot of people who come will be in market in zero to 12 months.”

Keep reading after the jump!

Test Drive Studio

The Test Drive Studio is a new program that GM has been considering for some time. Beginning in four markets this spring, the studios are semi-permanent or permanent brick-and-mortar facilities with minimal branding.

“It’s a concept I discussed 10 years ago; now we are making it come to life,” says Tihanyl. The studios will showcase Chevrolet’s “heart of the market” products for “modern families” such as the Malibu, Traverse, and Equinox, along with competitors in respective segments.

The pilot studios will be located in Miami, Los Angeles, Philadelphia, and Chicago. Locations of subsequent studios will be based on ZIP code targets for Chevy products. As Chevrolet is still working out the location details, we know that they will be located in either industrial or high-traffic retail areas.

“It’s a non-threatening environment,” says Tihanyl. “It’s not pressure -filled; you can drive all the right competitive products against the [Chevys]. If you take Malibu as an example, we will also have vehicles like Camry, Accord, Ford Fusion, or Taurus, so you get a really good cluster of vehicles to experience at your own pace.”

In that regard, the goal seems to be a completely different experience than what a traditional dealership may offer, with salespeople not watching a customer’s every step. What’s more, the studio will not look like a dealership nor will it carry the Chevrolet brand.

Marketing The Studio

To market the studio, GM’s bow tie brand will invest in a broad digital advertising play and track shoppers.”So, hypothetically, if you are on Edmunds.com and shopping a Camry, we are going to offer up an opportunity to come to the Test Drive Studio in that market to compare everything you have in your shopping set right now. Our feeling is you may have not had the Malibu in your consideration set, but if you try it, you will,” said Tinahyl.

The GM Authority Take

It’s official: Chevy is on a roll! Between the upcoming Cruze, Volt and redesigned Malibu, to the sales success of its launch vehicles and the  upcoming marketing initiatives, there’s no denying that – when it comes to Chevrolet – things are abrewin’.

More specifically, both the Test Drive Studio as well as the Auto Show test drive initiatives – are excellent ways to market and get people behind the wheel of Chevrolets. The current mind set within GM seems to be that if people experience Chevy vehicles, then they’ll add them to their shortlist of possible candidates.

The Test Drive Studio approach seems to be a very effective program that will save people time in the car buying/shopping process: not having to go to multiple dealers to test drive cars will be a huge time saver! All in all, we like the “put your product where your mouth is” mindset that takes GM’s “May The Best Car Win” program one step further. The only question now is, when will Buick, GMC, and Cadillac get the same type of treatment? Keep it up, Chevy!

[Source: Marketing Daily]