GM will push metro megastores

[nadepalma]

This is a related story to one posted yesterday - GM tackles glut of dealerships - where GM was talking about further consolidating their dealer network.


GM will push metro megastores
Goal is to put all brands under 1 roof
Jamie LaReau
Automotive News
January 19, 2008 - 12:01 am ET

DETROIT -- General Motors is preparing to make public a plan to encourage the creation of superstores in major metro areas that would carry every GM brand.

At next month's annual convention of the National Automobile Dealers Association in San Francisco, GM will describe its efforts to collect all its brands under one roof.

GM is trying to whittle down the number of dealerships in certain regions, said Mark LaNeve, GM's vice president of vehicle sales, service and marketing. "We've got a big effort going on in the major markets," LaNeve told Automotive News earlier this week.

The big stores — which LaNeve dubbed "GM Collections" — would allow GM to maintain a high profile in cities where real estate is costly. In many cities, domestic-brand dealers are selling because the real estate is more valuable than the franchise.

To create enough showroom space for extra franchises, dealers would be encouraged to move service and parts operations to satellite centers.

The superstore approach likely would make GM brands more attractive to big dealer groups such as AutoNation Inc. and Sonic Automotive Inc. The big stores also would help GM organize its dealerships around four brand groups:

1. Chevrolet

2. Buick-Pontiac-GMC

3. Saturn

4. Cadillac-Hummer-Saab.

Results are mixed

Progress has been spotty. General Motors has consolidated a large number of Buick, Pontiac and GMC franchises. But it has not aggressively pursued the consolidation of Cadillac, Hummer and Saab franchises.

At any rate, LaNeve emphasized that GM is sticking with the plan.

"We're not changing from four channels to some other number," he said. "It's more about size and structure. How big does a dealership need to be? Does service need to be right on the site? Can we help them in areas of their IT infrastructure and other things?"

LaNeve did not indicate which cities would get superstores first. An informed source says GM is evaluating all major markets.

One example of how the process might work: With GM's help, AutoNation opened a GM superstore last November in Fort Lauderdale, Fla. The dealer group purchased a store that carried Buick, Pontiac, GMC and Saturn, then transferred those franchises to its own store, Maroone Chevrolet.

GM played the role of matchmaker, helping the buyer and seller negotiate a deal.

"It was good for everybody," says AutoNation spokesman Marc Cannon.

Mixed reaction

Dealers contacted by Automotive News last week had a mixed reaction. One dealer who asked not to be identified predicted that off-site service centers would alienate customers.

[XCR440SP]

Bad idea, the mega store idea has goods and bads and is arguable, but not having service on the sales lot is a terrible idea. If I have a problem, I want to be able to talk to my salesman instead of having him at a different location, also, it gives me the impression when buying that service isn't important to this dealership and to me thats more important than price, and finally the big problem with this is, when I go in for service I also like to go look at the car lot, and I've bought more than once when I didn't plan on it, so I think this will cost a lot of sales and service buisiness.

[t-rex]

I agree with the above post. While sound in concept, GM's idea fails to address how important after-sales service is to customers. Many buyers will purchase from a specific dealer solely because of the reputation of the service department.

And I'm still recoiling from hearing the one poster on the other thread mention having a GM dealer in a town with only 300 hundred people!

[DuSpinnst]

I've been saying that for years.

[eaton53]

In smaller areas there is definitely no rhyme or reason. Just within 20 miles of me there are:
Cadillac
Cadillac Pontiac
Cadillac Pontiac Buick GMC
Cadillac Pontiac Buick GMC Chevrolet
Chevrolet
Chevrolet Buick
Buick Pontiac GMC
Saturn
Hummer

[dederer]

Once my warranty period is complete, I have never returned to the dealer for service. I don't even know anyone that has returned dealer after the warranty is complete. Our area has already adopted the plan mentioned. The Saturn dealers are spread to thinly and don't give adequate coverage for servicing the vehicle. A centrally located GM service center would help.

[stevecmh]

i do like the Hummer Caddy Saab group.. it makes sense.

they really need to start loading up on Saturn dealers

[CJ Thunder]

Originally Posted by nadepalma

1. Chevrolet

2. Buick-Pontiac-GMC

3. Saturn

4. Cadillac-Hummer-Saab.

Never understood the way it is now. Should be:

Chevrolet Buick

Pontiac Cadillac

Saturn Saab

GMC Hummer

Or something like that. Either way buying a new car gets all types of people and GM doesn't sell Duesenbergs.

[Steel4ring]

GM nees to shut down 100-200 Chevy or PBG dealers and convert them over to Saturn.

Saturn needs a bigger foot print, while the others need to get smaller.....no reason for me to have 4 Chevy dealers and 3 PBG dealers within 20 minutes of me.

BTW, I have only one Saab and Hummer dealer within 45 minutes.

[eaton53]

And I'm still recoiling from hearing the one poster on the other thread mention having a GM dealer in a town with only 300 people!

That dealership is not a problem. I'm sure it is very small, out in the middle of nowhere with no competition (except for maybe a nearby Ford store) and profitable.

The problem is in larger cities where unprofitable dealers don't keep their stores up to date and cannibalize each other.

[ponyok67]

Megastores are everywhere in my city. They are somewhat separated by pipe fences however the driveways and lots blend into one another. True - all in one - stores may be OK in the right markets but the service and sales separate - NOT OK. In my x sales experience they were totally related and very much depended on each other. "Mr. car customer, meet the service manager that will help you in the future." - "Mr. service customer, meet the salesman that can help you with that truck you were talking about." And the customer showed great comfort in knowing that it was that simple and convenient and like has been said - many looked around on the lot while being serviced. And we have all had that experience - so - NO DEAL on the service some where else. Anything else is just blasphemy.

[FStephenMasek]

How about this: If a dealership is not good enough to have all of the GM brands, it is not good enough to have any of them? Leveraging their advertising dollars by bringing customers into a dealership with every GM brand would be very wise. Rather than have a prospective customer leave if tehy do not like whatever they came to see, there will be a far greater chance that they will see something else they like, and perhaps something else they did not know exists. It may be difficult to understand for those of us with a car hobby, but the average buyer probably does not even know that many of GM's current models exist, or still associates a model name with a design from 10 or 20 years ago.

[dederer]

Saab is barely on the map here. One single brand Saab dealer and one c-h-s dealer that doesn't even mention it sells them. Not much marketing support on radio, TV or newspapers for them; I'm surprised that they sell any Saab's here at all.

[The Law]

Chevrolet Buick

Pontiac Cadillac

Saturn Saab

GMC Hummer

This doesn't work b/c all these brands share price,platforms,styling among other things.

Mega Stores seem ok for bigger cities b/c the plan is to maximize real estate space.With the Added service centers (GM Performance Parts, GM Goodwrench) and throughout the community, that would work b/c they close enough if you breakdown. Only thing is: How well will the dealerships know their products if they don't service them?

[kenman923]

Paring Saab with Cadillac and Hummer will expand Saab's presence.