In both the east and western coasts of the United States, General Motors hasn’t been able to perform as strongly as it has in other regions, such as the Midwest. So in an effort to boost sales in these locations, the automaker will invest $200 million in dealership renovations in the metropolitan areas of New York, New Jersey and California.
According to The Detroit News, the plan is separate from the company’s already announced facility improvement program, which projects that 92 percent of all GM dealers will be spruced up by 2016, with 96 percent of the entire dealer body enrolled in the program. The above-and-beyond plan for coastal dealers involves either renovating the dealerships, relocating them, or in some cases, shutting them down altogether.
At a time of year when luxury car ATP usually rises.
Sales decreased 5.6 percent to 16,670 units during the first ten months of 2024.
Specifically critical minerals supply chain development.
Scheduled for a Spring 2025 launch.
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How is GM investing money in a dealership that is owned by a franchisee?
Can't GM strongly urge (coerce) dealerships to adopt changes that they want made (with the ultimate goal of selling more vehicles, but perhaps at an inconvenience or undue burden to the dealer) through various means?
@Steve subsidies for redevelopment/redesign would be just one example...
Hope they can make inroads here (NJ), Subaru has it's NA headquarters in Cherry Hill and they and other imports dominate the roads in terms of new cars around here, with the exception of the large SUV space.
Subaru has partnered with United By Blue, a Philly based clothing company that takes a pound of trash out of the ocean/connected waterways for every item it sells. So Subaru sponsors cleanups and gets branded with t-shirts and other gear, and they showcase new Subaru vehicles by wrapping them in custom logos/designs for the companies they partner with.
If a GM brand wanted to make inroads with people who live on the coasts and care about the environment (looking at you Chevy), then maybe they should partner with the Surfrider Foundation or some other cause/outfit that has common environmental goals and use it as a platform to showcase the work they're doing towards those ends while also exposing people who share those concerns to GM products. There are tons of organizations that would love to have a Volt wrapped in their company/non-profit org logo driving around, charging in conspicuous locations...
GM has a few problems related to their volume. In my opinion the issues are dealer facilities, allocation and distribution peaks and valleys for dealers, vehicle margins at the dealer level, incentive strategy and their complexities, too many dealers, and the lack of consistency for Buick-GMC representation.
The dealer facility issue is currently being addressed. The facilities are amazing, look great and provide for the amenities that consumers are looking for in their next dealer facility. There have some dealers that have either short cut the program and have only placed a band aid on their buildings. What's sad about that is even though these dealers did the minimum, they will be rewarded with the maximum payout. Dealers who put in more and went above the minimum should be rewarded at a higher level on the essential brand elements program. Maybe a second tier for their investment. That would allow for metro dealers in all markets, not just coastal markets to spend to their economy of scale. It's exciting to see an older store transformed, and it's nice to see the partnership of investment take place although it it's challenging to navigate and administer.
Secondly the allocation and distribution system needs to be tweaked. The lead time to products and their receipt at the dealer locations is too long. The time has gotten better; however it is still way too long. From start to finish it takes about 6 to 8 weeks. This is down from 12 weeks. When a dealer has a big month, and sells down the inventory it generates an allocation that will arrive in 6 weeks at best. This means that when customers are in market looking to make that vehicle choice, the dealers will be out of the products that are hot and in demand. Chevy Spark is a great example. It takes months and months to get these products. When a dealer has it, they sell them quickly, and them can't replenish fast enough to maximize the vehicle's appeal. The same is true for other makes and models that are domestically made like the Equinox. Have you ever noticed how an tier 1 import retailer never has an empty shelf? It takes them two weeks to reload, which allows them to strike while the iron is hot and gain share. GM has gotten better, but to gain the additional they need to put the products where they are most in demand in a much quicker fashion by reducing build combinations, building the cars in fewer combinations, having greater availability of dealer add ons at the dealer level, and allocate the products built as they are on the assembly line on further down the assembly process. Teir 1 imports allocate further down the build cycle, thus allowing them to place the cars where inventory is greatest.
Dealer margins, incentives and complexity are all related issues. Both dealer and consumer want the most they can get for their vehicles. The dealer wants the most for his vehicle, and wants to pay the least for the consumer trade. The consumer wants the most for their trade and pay the least for their new car. It's no secret. I order to have the perception of giving the most for a trade, dealers will take some of their margin and apply this amount to the actual cash value of the trade to give the impression that the dealer is giving them more for their trade versus their competitor. Having a smaller margin ties the dealers hands and does not allow for this to take place. By giving a more competitive margin, dealers could give more for a trade and sell a few more cars. To bridge this gap, GM offers a ton of incentives (which devalue the product) to bridge the gap in an effort to make a deal happen. Add the complexity of who qualifys for what rebate and you have a real mess on your hands. The is simplest approach is always better. A dealer cash program rather than customer incentive allows the dealer the flexibility to choose a lower selling price or a higher trade value. This allows the dealer to be more competitive in the market with those customers looking, with out devaluing the new product. This scenario does not even include for added dealer margins, meaning GM could still offer a lower MSRP with a smaller margin and use dealer cash to supplant the needed additional margin to put a deal together, all without complexity.
Lastly, GM has too many outlets. Regardless of market size, GM needs to assist with reducing the number of outlets and being more consistent with brand offerings. May times have I seen a Chevy Buick dual without GMC. Confuses the consumer. Really, in a Chevy Buick dual, they need to offer that dealer the opportunity to build the proper imaged showroom for Chevrolet, and offer them a further chance to continue with Buick with the understanding they build am imaged showroom for Buick and GMC. This would straighten out the market channel and allow for a more consistent approach for the brand with better representation. In that scenario, if the dealer does not wish to invest in a Buick GMC showroom, them they need to give up the Buick for a one time cash payment. This would be the same for a stand alone Buick dealer. This could also be the same approach for a Chevy GMC dual. Make the same offerings as above. In this outline, more dealers dialed would allow GM to have better, more consistent representation, possibly reduce their head count and maybe mitigate the increase in cost at Chevrolet with their plan to put District Managers in the field (a great move!) .
In closing, GM has made some strides since 2008. Many of them very good and sound business decisions; however, more needs to be accomplished to win back consumers. There is more I could expound upon, but I need to open the doors at my remodeled EBE compliant Chevrolet Buick (no GMC) store that is running low on inventory due to a hot retail market in my area. When I get there today I will feel the pride as I show them around all while explaining I will have inventory to look at in about 8 weeks. So, as I deliver one of the last Cruzes, while showing another customer picture of the spark and try to switch them to a sonic LT , that I need to get on a locate, the question in their mind is why is the deal not as good as the Yaris up the road at the Toyota dealer because I valued their trade as less and they are confused about the retail price relative to the ad from the local marketing group as saying there is more rebate than I am giving.
Keep up the good strides GM, but please, deal with the issues listed above so we can together, sell more cars and restore GM to its rightful place on top of the automotive world.