One prominent member of General Motors’ dealer advisory board believes the automaker isn’t doing dealerships any favors when it comes to fixed operations. In fact, Peter Lanzavecchia, president of Burns Buick-GMC in suburban Philadelphia, thinks GM’s work interferes with local dealers more than anything.
“GM, with its nanny-state attitude, seems to forget dealers are pretty savvy, and maybe your go-to-market strategy in your own market, the market that the dealer knows best, would have been effective,” he told Automotive News in a report published Monday.
Lanzavecchia noted national advertising campaigns for service and parts often don’t cut it in high-cost markets. The dealer president noted GM’s advertised special for a $49.95 express service package that includes an oil and filter change, tire rotation and multipoint inspection. Lanzavecchia said the price is simply too low for markets like his, and the national specials intrude on a dealer’s ability to offer their own discounts.
GM defended the national advertisements and said the prices aim to build customer loyalty.
“Our overarching objective is to build customer loyalty through a great service lane experience because we know that customers who use the dealer service lane are far more likely to repurchase,” said GM spokesman Jim Cain.
Mark Scarpelli, former chairman of the National Automobile Dealers Association, also complained of similar practices by an unnamed automaker. But, he also noted automakers often demand dealers purchase things like tires, oil and replacement parts from an approved vendor.
And the trouble comes as many GM dealers see declines in the parts and service departments altogether. Burns Buick-GMC’s service department reportedly brought in $55,000 in 2017, down from $305,000 in 2014.
“There’s not the revenue growth that we need, and there’s been a massive increase in costs,” Lanzavecchia said.
Comments
Aww poor baby. Shady dealer is upset he’s not making enough 🙁 Either deal with it or contract with another brand.
“Lanzavecchia said the price is simply too low for markets like his, and the national specials intrude on a dealer’s ability to offer their own discounts.”
I think the price listed is more than fair. Low prices get customers in the door. High prices keep them away.
Considering that I can usually pick up 5 qts of Mobil 1 Full Synthetic plus a filter at Advance Auto or Auto Zone for under $30 on a regular basis is the reason I refuse to take my car ANYWHERE to get the oil changed and do it myself. Takes me 15-20 minutes max and I can do other things while it’s draining.
Tire Rotation? Usually comes standard from any tire outlet like GoodYear for the life of the tires…
Multi-Point Inspection? Oh you mean “Let me check your fluids/filters/bushings and lie to your face about their quality in order to upsell you”? Yeah… no thanks…
Dealers are the worst part of the automotive industry. A legacy institution that should be done away with to the benefit of consumers and manufacturers. Its a shame that dealerships are allowed to tarnish brand equity as they do.
You are 100% correct that dealerships are the worst part of the auto industry. Greedy owners are totally unscrupulous with how they overcharge customers. They are grossly overcharging for repairs to pay for huge yachts and planes. After working in fixed operations for forty four years, nothing surprises me. Time for the manufacturers to step in and eliminate this problem.
I too agree 100%. Lying service managers. No one seems to know anything. Get rid of the dealership and sell cars on Amazon or something like this. Give warranty vouchers or something like that so your TRUSTED tech can fix your car. Mr. GM spokesman Jim Cain has it backwards, people who repurchase use the service lane, NOT people who use the service lane repurchase. Also GM knows nothing about BRAND LOYALTY, they want to tell you welcome to the family, we are great. But after owning 5 Cadillacs they will do nothing to fix the DEFECTIVE CUE SCREEN in our ATS. My main trouble with the new dealership of today is, they sell many brands and they simply don’t care whos vehicle they sell you.
It is not an accident that so many of these businesses have become known as STEALERSHIPS!
Well while it is true many dealers do have poor service departments there are some good ones out there and they do make a good source of income.
GM mostly relies on mailers for marketing but have really lacked much in TV coverage. Back in the Goodwrench days the racing and the TV marketing with Mr. Goodwrench gave them much media coverage.
Ford has done well with their marketing and tire sales through dealers. The competition in this segment is tough and you have to go out to get customers.
I suspect that GM would find much better run service departments if they market them better and make them more profitable. If they make better money they can pay techs better and attract the better talent.
There is a lack of good techs out there and the better the pay the better techs you will have. The better techs the better the service.
I would prefer to buy new cars directly from the manufacturer, like Tesla.
Courts have repeatedly ruled that that is illegal under antitrust laws.
The last time I was at the dealership was for a quote to repair the heat and for a new cover for the driver’s seat of my truck. They quoted me over $1600. My first question was…”Why so much?” They said that they farm this out, and after it comes back from the upholstery shop, it comes back to fix the heat. I asked them just to give the heat element to the upholsterer instead of charging me double labor to tear the seat down. They said that they can’t do that.
As the first sentence says… THE LAST TIME I WAS AT THE DEALERSHIP!
If you buy a car because of the dealer then you are not very bright! The service department is the last thing I think about when purchasing a car, the waiting room is second to last, 3rd is what the build looks like!
You should buy a car or truck based solely on the vehicle!
WOW Brian, we agree 100%
I lost 2 injectors, on opposite banks, on my Dmax at 230k miles. Dealer quoted $5k to replace all 8, or $4.6k to replace 2. I went to a very reputable independent shop and was quoted $2.8k. Dealer then came down to $3k and a free loaner, so I used the dealer.
A week after I got my truck back I was “making” oil again – the original indication of a failed injector (diesel getting dumped into the engine) – at a faster rate than before the repair. Dealer wouldn’t acknowledge the oil was high on the dipstick, saying it was so clean he couldn’t see it (no $#i+ it was clean…it was deluted with diesel). I finally shamed the management by wiping the dipstick clean and reinserting it, but stopping 2 inches short of full insertion (without letting them see), then pulling it out and they said “it looks fine,” and then showing them how I didn’t fully insert it.
They reluctantly agreed to open the engine back up and immediately found a missing o-ring at one injector, with an adjacent puddle of fuel in a low spot on the head.
No apology, no acknowledgement of fault. Just a chicken $#i+ comment “Well, you’ve got the cleanest high-mile Dmax engine we’ve ever seen.” No kidding, I drove it for 10k miles on diluted oil.
After they returned my truck to me they would never return my phone call again. For poops and giggles I still call once a year or so and leave a message to call me. NOTHING.
THIS is why people are over and done with the “dealership experience.”
Even at 3K that is staggering! Technology driving repair costs sky high. I replaced/upgraded all 6 injectors on my old 24V Cummns for about 600 bucks a few years back, but that was long before common rail, just plain old orifices on those.
It was a first-generation (LB7) Dmax, and required significant time to be able to access the injectors (the “parts” were only $50/ea; the rest labor). The next generation versions (MY 2004.5 and later) featured a significant head redesign that allowed injector replacement without the significant disassembly of the top of the heads, and for a literal fraction of the cost. It was a known issue, and caused GM to extend the warranty for injectors to 200k miles – which mine blew through with $0 of attention. I drove the truck for 256k miles and, other than oil changes, this was the only time the engine was touched.
This F/S oil and filter specials at the parts stores around here are $32.95. Changing the oil on my two LFX 3.6’s is not a 15 minute job, guess I’m slow, so the $50 F/S plus tire rotation and fluids check works. My two dealers, Chev and Cad are good. However, I still enjoy the ritual of changing my own oil.
I’m really wondering if the 3-5 down votes on most of our posts are the same 3 people who happen to work at car dealerships…