During its investor presentation held earlier this week, GM confirmed its expectations that its EV portfolio will prove profitable as soon as 2025. To back its claims, The General pointed to several key developments, one being the introduction of a new digital retailing platform for the sale of electric vehicles.
The Detroit-based automaker’s new digital retail platform is expected to reduce costs to GM by an estimated $2,000 per vehicle. The objective of this platform is to improve the shopping and purchase experience for EV customers, and streamline distribution.
To increase the efficiency in the delivery of electric-powered vehicles, GM will hold the vehicles at one of three EV fulfillment centers. According to a report by Automotive News, dealers will still receive allotments for test drives and other in-person affairs, but a majority of EVs will be stored at these regional centers. This approach will reduce the likelihood of unpopular vehicles sitting on lots, as well as reduce floorplan costs. GM also anticipates that this will speed up delivery times, to as fast as four days.
“The biggest enterprise-wide cost savings will come as we and the dealers change how we handle inventory, which means we’re reducing how much we’re … incentivizing vehicles that were ordered that aren’t popular,” GM President Mark Reuss explained. “At the same time, we’ll improve the customer experience by delivering the exact vehicles our customers want quickly and efficiently.”
GM has been planning this retail platform for some time now. Back in March 2021, GM Authority reported that The General contemplated this idea as a way to increase the efficiency in the delivery process of EVs. Additionally, the COVID-19 pandemic helped to normalize customers to an online buying process, making the transition to an online retail platform easier to justify.
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Comments
So much wrong with this. The ignorance of these progressives.
There’s a reason that dealerships have become the way to sell cars, and it’s the same reason that homes are bought through real estate agents or groceries are bought at a market. It’s the most efficient way per the order of nature.
Is direct selling autos was so obviously efficient, then dealers wouldn’t exist. I know few know this but before the internet, there was this thing called mail order……. And many early cars could be bought this way…. And many dealerships had tried it to streamline the buying process, but the fact is, when you make a purchase that you have to finance, register with the local government and maintain over its life cycle.
I hate to break it to the internet conspiracy theorists…. But there’s no secret cabal where dealships plot to keep car makers under their thumb
Further, WTF with incentives????? Incentives don’t exist because dealerships order wrong cars. They exist cause car makers want to move more product, so the make trucks like the Silverado all star package….. a vanilla truck with all your mainstream options, and push dealerships to stock with a 5K off sticker on the lawn to steal ford buyers.
Yup you’re correct. Retail distribution is the most efficient way to get cars and most other products to consumers. Even Tesla has realized this and has indicated that they are considering a pivot to a large-scale showroom model where they will stock sellable inventory. The whole “order online and wait while it’s built” model only works when you’re the only option for consumers (also not good). With EV competition increasing rapidly, they foresee that they’re going to lose their edge to automakers who have a product that you can buy NOW.
What people also don’t realize is that in many states, dealerships can be, and have been, owned either partially or completely by manufacturers. In most cases the manufacturer opts to sell to independent operators. The process of storing and selling new cars is one of the most complex retail processes, perhaps second only to housing and firearms. Laws regarding registration, taxation, and consumer protection vary from state-to-state and sometimes county-to-county. Add to that another layer of the complexity for the lending/documentation process. A massive automaker doesn’t have the patience or the profit incentive to specialize on such a small scale, hence why over the past century they’ve gradually ceded such operations to independent operators.
If it were true that dealerships are the best way to sell cars then why are so many dealership associations fighting Tesla and other EV startup companies on their plans to sell direct to the consumer?
I happen to have a really good Chevy dealership but I’ve dumped other GM (and other manufacturers’) dealerships for fraud, both in the sales department and in the service department.
Sounds like smoke and mirrors to me. Catering to the Gen Z kids who never leave home and order everything online! How boring!
GM isn’t doing this because young people demand it. They’re doing it because the dinosaurs who run dealerships don’t want to stock EVs they have neither the interest nor the aptitude to sell. So calm down, grandpa: this is actually an example if the world *still* catering to your every whim.
Even if that were true, trust me this has nothing to do with what dealers want. GM couldn’t care less what you want as a dealer. If you won’t sell EV’s, they’ll cut you off, just like they’ve already done with Cadillac (look up how many Cadillac dealers have been shut down). Plus, dealers would sell EV-powered office chairs as long as they can make money doing it.
Fred…Get back to flipping burgers. You know nothing about the car business. Dealers will sell pedal cars. If, they make money.
There’s no secret, it’s just like buying something at Macy’s. You’re not walking out with the product from the showroom, it’s getting delivered from a warehouse. What’s the big deal? They’ll probably end up offering home delivery as well. Anything that reduces or eliminates time spent at a dealership shouldn’t be viewed as negative.
Yup, I’m sure if you want to do all the traditional stuff at the dealer that will all still be the same. They’re just cutting down on stock since a growing number of dealers don’t have the land that used to be available in years past.
They have tried this hub model before and it didn’t work. The popular models, colors, and configurations will sell quickly. The consumer will wait once again on an order or settle for their second or third choice. It sounds good in theory. However, the execution doesn’t work. They have completed vehicles at plants now. That have been sitting for months and they still don’t have an answer for delivery time. How can they pull this off?
Large inventory is wasteful. It adds cost to operations, and provides zero value to most customers. For a $30-$60,000 car, I expect most customers won’t have a problem waiting 4 days for delivery. The dealer may even offer to deliver the car to the customer’s home.
Whatever. The point remains that owning and managing inventory adds cost and provides little value to customers.
GM has to revamp the buying process. I am a GM guy, having had over 100 GM cars/trucks. But I did buy a Tesla and the buying experience was unlike anything I had ever experienced. I test drove the model I was interested in and placed an order. I filled out all the information online including the lease info. They called me in three weeks and said my car was ready to be picked up. I showed up and the rep had a folder for me that needed my signature in three places. I could have been out the door in 5 minutes, but I did have some operational questions and took about 20 minutes. No pushy sales/finance pressure. They were very busy as they were delivering 40 (yes 40) cars that day. Whoever is designing the GM system should buy a Tesla as a regular person not a GM rep.
I had the exact same experience with Tesla and was very impressed. My problem with GM is the dealerships. Loathesome.