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.
Comments
This could easily be interpreted as a way for GM to reduce is inventory, and bolster its bottom line at the expense of dealerships.
Hold on one second…Why are wholesale distributors allowed to sell their products at lower prices than the manufacturer itself?!? This makes NO sense whatsoever. How does GM plan to make long-term profits from its cars if it doesn’t sell maintenance parts for them? I am clearly missing something here…
A big problem is that GM has now taken away the dealers ability to buy AcDelco stock from their local distributor.
From a retired GM/ACDelco employee. The idea is to insure dealers are profitable. Profitable dealers can offer more services to attract customers. GM sells an alternator to a dealer for $75 (next day delivery) and a local distributor sells it for $55. ( 1/2 hr delivery) Dealer makes more $$$, the customer is satisfied ( in and out the same day) and then GM sells the distributor the replacement alternator. Who wins??? EVERYONE
Dealers are judged on the same day service repair. If the dealer has to wait for the part: #1 he pays more. #2 He gets knocked for not providing “same day in and out”
This is just a recycled program from a new manager. This was tried years ago and failed.
Its VOLUNTARY.
If they do not like it do not do it. Make your customers unhappy and wait for the part. It is their business to treat the customer as they wish.
GM preaches same day repair. Dealers cannot stock everything. Most of us have good relationships with other GM dealers and sell back and forth. GM DOES NOT count those items as bought from GM obviously. They want the vehicle fixed the same day, but must buy from them. They cannot have both. Also any extra money-making services bought from other vendors also do not count as items bought from GM. We understand this. We make money on flush services. The non-GM part numbers work against us in the grand scheme. GM promises a large bonus, but put so many loopholes in the system. Only the largest dealerships will win with this program. At the same time GM also cut the return reserve. Dealers cannot send as much back when John Q Public thinks he might need a part and orders it, but returns it 6 months later. Multiply this by jobbers, body shops and other retail customers. I pity the dealers that do not have quality personel that make very few mistakes. This after making all the dealers refresh their buildings etc. We are all looking to save a buck somewhere. Buying from AC Delco suppliers were those bucks.
Most dealers don’t want to pay quality experienced people who know the parts business and make very few errors. They seem to think that now with the modern computer parts catalogs a parts man does not really need that much experience so he can hire a young kid and pay him very little. What the dealer doesn’t realize is that amount of obsolescence and incorrect special ordered parts are building up and the factory is not very cooperative when it comes to parts return programs. The dealer would have been way ahead dollar wise if he just payed good experienced people to begin with. Thg old saying does hold true ” if you pay peanuts, you get monkeys”