In a recent interview, GM North America President Mark Reuss was asked why the automaker isn’t allocating 2014 Corvette C7 Stingrays to dealers who have actual sold orders from customers in their area of responsibility, bringing up the topic of initial C7 allocation that has resulted in contention among certain Chevrolet dealers and Corvette enthusiasts.
Here’s what Mr. Reuss had to say about GM’s decision to limit the launch of the 2014 C7 Stingray to certain dealers (context, in brackets, ours):
“We can only make a certain amount of cars in a certain amount of time, so the first allocations are based on where we have the biggest density of Corvette [buyers]. I don’t think selling four Corvettes in the prior year is a tall order, because we’re not gonna take away customers from dealerships that have really performed in Corvette markets.
That’s the tradeoff here: we’d like to make more cars faster earlier but have to launch this with high quality and that’s our launch cadence and it’s a very good one. We ramp up quick, and I don’t think that’s unfair at all, so… sell four Corvettes and you’re gonna get great allocation.”
The GM Authority Take
There seems to be little question that The General’s launch strategy for the C7 will have some negative impact on some dealerships and some C7 buyers. Conversely, the plan also has the potential to impact other stores and C7 customers positively — making it a traditional trade-off scenario.
It is, however, worth nothing that the strategy to limit C7 allocation is temporary and will only be in place for the launch period during which preliminary inventory is highly constrained… that said, GM has yet to provide a timeframe for when all Chevrolet dealers will be able to sell the new Stingray.
But the proposed strategy of providing allocation to those dealers that have sold C7 orders doesn’t sound like a bad one, either…
Comments
To a certain extent this is the way it should be BUT I come from a area and have a dealer who doesn,t sell 4 vettes a year.In last 4 years I have bought over 5 new GM cars from local dealers.I C 7 only to have to take it back to my local dealer to have warranty work done on it.
On sold orders a small amount should go to any dealer who has a customer in his area who is ready and willing to purchase a new one.
I know this is a balancing act but sometimes exceptions to a good customer need to be made.No doubt some dealer will be on e-bay with units to be sold.Not good.
I am able to find a dealer who can get me one within a reasonable time.I am lucky but I still have to go over 3 hours to get there.
Although it is GM’s dealers that are its strength (how else can you explain the crap GM continued to sell in large volumes in the 70s and 80s, and early 90s?), GM cares not one bit about dealer loyalty. Programs like EBE, SFE, and stair steps ALL result in tiered pricing (which, by the way, is illegal) and tend to tear loyal customers away from one dealer and put them in the hands of another, where they might not like the overall experience. And if they aren’t as happy with the new dealer, will they remain brand loyal or decide its time to try something else altogether?
And shutting out dealers of allocation of product based on an arbitrary sales number (why is 4 a better minimum than 3? Isnt every sale a win?) is just one more example of this. And “Illiceman” is not alone in feeling its effects.
Not to be contrary, but would waiting until the spring of 2014 for the C7 really be that much of a burden to folks who buy from lower volume Corvette dealers? I am sure that 6 months after launch, anyone who wants one will be able to fulfill that dream.
If I’ve said it once, I will say it again…GM marketing department needs to be purged. Sending the first cars to dealers who actually have orders will guarantee the inventory will be low. WHY would you want to potentially give up or at best delay guaranteed sales this way? These people don’t seem to get it.
are chev trying to send a demonstrator to each dealer who have sold 4p/a or fill paid orders first, i would think a paid order had some priority.
With over 30 years in GM Dealerships, as a Commercial Fleet Manager, here is the inside tract on how it really works. Ford GM & Chrysler ALL work on a turn & earn policy. Even toyota and others may have this on certain models, like AMG content. Dealerships have to sell that EXACT product line to get another. With all new “Hot” products there are always consumers that will pay crazy prices to be the first on the block to have 1. Many dealerships will insert “Sold” orders into the system to force a new vehicle build inventory. Trust me it doesn’t work that way ! There is no such thing as a “Paid SOLD ORDER”. The factories are way to big to see that they are paid, except Tesla. The order is coded as “sold” with the consumer’s basic information. The factory also knows that the order could be a FAKE to generate inventory for profit. Then the dealer can mark it up as they please once they have it. When the C6 ZR1 first came out consumers’ where paying $15,000 (and more) over sticker. When the 5th Gen Camaro came out in 2010, the V8 models first commanded $5,000 over sticker. The consumer sets the prices on new roll outs, not the factory. So on initial roll out > the factory can’t produce 4 vehicles in 1 day for each dealer. That would be about a 24,000 unit build & physical delivery (domestic) in 1 day & that will never happen. Inventories ALWAYS start extremely low at new initial roll out. After 6 to 12 months inventories grow & the prices (usually-but not always) fall. Supply & demand. ALSO; a dealer who gets caught putting in “fake” sold orders can/will be severely penalized by inventory allocation reduction. Don’t forget some dealers don’t sell 1 Corvette in a year because of demographics. A small rural dealer may have a huge truck allocation based on actual sales. Selling a large amount of Silverado trucks does not earn a Corvette. Same goes for an inner city dealer that sell a huge amount of “core” cars (Mailbu-Cruze etc.) may not get an allocated unit like a DuraMax Crew Cab in the usual 8 weeks. The person who keeps on talking out his “mouth” without knowing how it works shouldn’t make 1 single comment here; Richard. Inventory control is computer controlled by “turn and earn”. Its that simple.
We want a new GMC Z71 All Terrain so bad & I know that I will wait a full model year (or 2) to order one because they will be “hot” on initial build. So rest assured there will not be ANY “purging” of ANY marketing departments. LASTLY; marketing departments have absolutely NOTHING to do with allocation, build, sales, delivery etc. The local “Zone” District Manager handles all that based on that “Zone’s” actual recent historical sales record.
I hope that I answered any thoughts on this subject; I apologize that I had to spell it out in so many words. But “I do get it” because of experience. Not an uneducated guess because I have a computer. If anybody has any questions, please ask. Thank you ! !
Thanks, American Patrick. Finally some actual factual information on the subject. I really do not see a problem with GM’s allocation strategy and it isn’t like someone will not be able to get a new C7 if they really want one. There are several large dealers that can drop ship a car. I know for a fact that Stanford will ship you a Corvette wherever you live. And of course there is always the museum delivery option available.
It doesn’t sound as bad as i thought, our dealer will get some , I just want to see one this year,—- and touch it
I don’t know who gave me a thumbs down, BUT, I have a real good guess ! Actual hands on experience will always out weigh your opinion ! Your opinion is not fact based ! I can back up everything I said…. Have fun & enjoy today everybody ! ! Thank you ! !
There is one major flaw in this system. Only allowing certain dealers to have the car first will actually ruin a smaller dealership’s ability to gain business opportunities. Some of these larger GM dealers have absolutely horrible customer service, as we saw last year with the trashed white SS Camaro last year. I had a similar experience with my mom’s Camaro 2 years ago with a large Ohio dealer, that is known for selling high end GM vehicles. The odds are, they will be getting one of the few C7 vettes right away, and if I had the money, I would refuse to buy from them, due to the horrible way they treated my mom’s car. Now, if the orders were every dealer for themselves, I would be more than happy to try one of the smaller dealers, and if the transaction was good, I would be a repeat customer. I have a marketing degree, and have ran a business, and I find it hard to believe that GM is taking this approach to market the cars and build customer relations. If cars were disbursed as they were ordered, it would make new customers for smaller dealers, and force the bigger guys, who absolutely suck at sales, to clean up their act and compete on a fair level.
For those who think that “some” of the larger dealerships have bad customer service ? Then how did they become big ? Hmm…. For those who think only small dealerships rule, Hmm…. then why are they small (except for demographics) It is damn tuff to keep everybody happy isn’t it ! It’s just a car under warranty, go buy a home & see what you get ! I have friends who purchased homes they shouldn’t have (no warranty) …. so (really) everything is relative; isn’t it ? Nobody ever forces anybody to make any purchase ! The great thing is if you don’t like your vehicle purchase you can trade it in, unlike a $250,000 house…..
I have a 2104 Corvette on order with my local dealership. I think priority should be when you placed an order. I could have ordered elsewhere at much larger corvette dealerships, but I wanted to support my local dealership.
PS. A much larger dealership was allowing me to reserve a spot on his order placement if I was to put $1000 down for that right, this was 2 months before we were able to logon to place my order.
This will be Corvette number 8 for me, I am more than ready. I hope ordering locally was a good decision.
Four new 2014 Corvettes @ Road American Race @ Elkhart lake WI yesterday….2 in the Corvette Corral, with MI lic plates, and two at the Chev Tent…..Green and Silver with plates…..Yellow and white at the tent….nice…..Like the fellow said…only so many can be built at the factory….just think, new 2013’s are selling with $10,000 discount, and another- $3,000….for Corvette owners….Patience is a virtue…….grasshopper….