"Old GM" Dealership Mindset

[nsap]

"Old GM" Dealership Mindset
www.gminsidenews.com
By: Nsap
February 21, 2008

Now that General Motors is shipping out some very competitive products to their vast dealership network the question keeps arising; why aren’t sales booming? Well, there are undoubtedly many reasons for that, but I have come to realize one of them that I initially had not. This issue is (well, it should be) rather easy to fix, but takes cooperation from dealerships. So GM is finally dishing out some, gasp, stellar products in many segments of the North American market, the media is recognizing this (how many times have I heard the phrase “GM is back” on TV and in print?), now we just need the public to realize that GM is once again producing product that doesn’t reek of ‘General Motors the-accounting-company.’ I’ve found that one big hurdle GM needs to cross in this immense battle to win public perception is its dealerships’ mindsets, at the grassroots of the industry.

The other night I was watching the ten o’clock news and a commercial for a local GM dealership came on. It was a nicely done one-minute spot; one that didn’t look like it was done on a tight budget. However what struck me is that they spent the whole minute talking about the 2008 Pontiac Grand Prix’s they had in stock. Wait a minute here. They were advertising their dealership around a car that; 1) is exiting production and 2) is, in comparison to most new GM sedans, uncompetitive. This same dealership has 2008 Chevrolet Malibu’s on their lot, a car that, mind you, is the North American Car of the Year. I was appalled by the commercial and just started ranting about it for several minutes to anyone in the room.

The unfortunate aspect of this is that it isn’t exclusive actions to just that dealership. I follow a rather large array of dealership in my region and most of them are still advertising products that are uncompetitive or have a far better in-house alternative. I’ve seen other advertisements where the guy talking is standing in front of a row of 2008 Cadillac CTS’s, but totally ignores them and only discusses the now old Buick LaCrosse. Why waste money on advertisements for an old product?

Another now unfashionable sense of advertising I notice with GM dealerships is that they show strictly trucks and SUV’s. They don’t show the new Lambda crossovers or even an older crossover like the Equinox, they show the gas-sucking GMT-900 vehicles. Granted, at LEAST the GMT-900’s are class-competitive and represent GM well, but who cares? GM does NOT need a perception boost in the truck and SUV market. They have over 80% of the full-size SUV market, a decent chunk of the truck market and their share continues to grow in both segments. GM is now focusing on their car and crossover lineup, because obviously that is where the market is going anyway.

In the defense of dealerships that are still advertising like this; it is hard to change. They have been stuck with products like Grand Prix and LaCrosse for a very long time. They have become accustom to marketing inferior products and good trucks/SUV. I suspect this problem is still persisting because of what dealerships are keeping in stock. I know most of the dealership in my region are stocking a truck to car ratio of 3:1. There also seems to be an abundance of older products like the Grand Prix. I’m not sure why they are still getting such products to put on the lot, but I assume it is because supplies of some of the new products like the Malibu and CTS are in short supply. They have to have something to put on the lot.

To me an effective advertising campaign for a GM dealership today would be to push the new products like the Malibu, CTS, Lambdas and the whole Saturn brand. Just having a dealership employee talk about one of those products on it with the actual car in the background would be good; just to let the public in that area know that the “new GM” products are at a dealership near you. Proof that the public, even the public that is currently rolling in a Japanese import, will look at a new GM product came to me just recently. I have talked a couple people into a 2008 Malibu, both of which currently drive rather new imports. However neither of those potential GM customers realized that the 2008 Malibu was on dealership lots and would have totally overlooked the car had I not pointed it out to them.

Let my clarify that I do not believe all GM dealerships are still advertising like this, but I do realize that a lot of them still are. I think it is going to take some time before dealerships truly are able to operate like they have superior product. They need to gain some of the brashness and bravado that so many Toyota and Honda dealerships have; a level of confidence that comes with knowing that you have superior product to the competition dealership down the street. Only in GM dealerships case, they don’t have to deal with bland product that sells purely on reputation, because GM’s new products have to fight to win. As one of the above people I referred to the new Malibu said, “All of the companies seem to no longer care about design…they all look the same. GM on the other hand, seems to actually design their cars [in reference to the 2008 Malibu].”

[skylark68]

I agree with your post, but I imagine that the dealership in question advertising the Grand Prix needs to move some stock of those old beasts. The Malibu is exposed and the public is learning about it through reviews and Chevrolet advertisements in print, online, TV, and billboards. The dealership needs to let folks know that they can get a Grand Prix since they probably have a large stock of them gathering dust.

[Phoenix]

That picture is hilarious and fits perfectly with your commentary. I think the reasons are clear for these problems, Grand Prix's and LaCrosse's are piling up on lots and they figure advertising them will get rid of them. The trucks and SUV's have always been a focus for the entire company so that doesn't surprise me.

[Hitman1970]

While I was TDY in Mass last week I heard an excellent local Chevrolet dealer radio ad. It stated that you buy another import car you need to consider the North American Car of the Year 2008 Chevrolet Malibu. It further stated that by x date it would have over 100 Malibus on the lot to ensure you would find the right sedan you were looking for.

I know many GM dealerships in the south with very small sedan inventories which can be a turn-off when you notice the Nissan dealership down the road has tons of cars to choose from.

[ericmvest]

General Motors dealerships consistently get higher JD Powers sales and service customer satisfaction ratings than Toyota brand dealerships. I am sure General Motors dealerships' advertising and sales stategies could improve, but on the very important aspect of customer handling, General Motors dealerships do a better job than Toyota brand dealers.

[montrealvue]

Great post NSAP....and the picture sums it up well. Like some of the dealers in my area that still have those horribly TACKY colored streamers on the antennas and prices on placards on the car roofs! Wow, if I buy it do I get the decorations too??? Where do I sign????

[Puzzel]

Originally Posted by Hitman1970

While I was TDY in Mass last week I heard an excellent local Chevrolet dealer radio ad. It stated that you buy another import car you need to consider the North American Car of the Year 2008 Chevrolet Malibu. It further stated that by x date it would have over 100 Malibus on the lot to ensure you would find the right sedan you were looking for.

I now many GM dealerships in the south with very small sedan inventories which can be a turn-off when you notice the Nissan dealership down the road has tons of cars to choose from.

Its the same issue with the Colorado and Canyon. The large Chevy dealer where I currently have my truck serviced, only had 1-3 Colorados for the longest time (up to about 7 now) and they are all in the very back of the lot (last row). But of course, every single one has an automatic transmission. You can't sell what your potential customers don't see. The dealer in MI that I bought my truck from had several Colorados, out front -- mine was even displayed in a place of prominence on the corner of the lot.

[nsap]

Originally Posted by ericmvest

General Motors dealerships consistently get higher JD Powers sales and service customer satisfaction ratings than Toyota brand dealerships. I am sure there are terrible General Motors dealerships, but on the average General Motors dealerships have better customer satisfaction than the Toyota brand dealers.

...no one is saying GM dealerships are bad.

[jkennedy293]

It would seem these dealers are all stuck in the '70s, and too stubborn to realize they need to update and modernize the way they do things.

[78chevyman]

The biggest problem at my dealership in South Texas is that most of the people in our area have not so good credit. They love the products and they flock in to kick the tires...but I had a lady the other day with 2nd chance credit and she wanted a 2008 Malibu LT for under $300 a month...not possible. So that is the common problem with most of the customers today in my area. I am not saying that some...and I mine a few...people in our area have good credit...but they want a 2008 Mailbu for under $300 too...very unrealistic on a $23K+ car.

[HotCarNut]

Originally Posted by nsap

...no one is saying GM dealerships are bad.

As a generalization, I will. A few good ones don't prove that the rest aren't terrible. The GM dealerships in my area are in drastic need of freshening, the sales staffs are (with a few exceptions) appallingly bad, extremely aggressive, and have zero product knowledge. I bought my '08 Acadia because I loved the vehicle, and the sales manager was great, but even he admitted that most of his sales guys were terrible and not very knowledgable.

[DealerGuyAtl]

Originally Posted by skylark68

I agree with your post, but I imagine that the dealership in question advertising the Grand Prix needs to move some stock of those old beasts. The Malibu is exposed and the public is learning about it through reviews and Chevrolet advertisements in print, online, TV, and billboards. The dealership needs to let folks know that they can get a Grand Prix since they probably have a large stock of them gathering dust.

Your absolutely correct. GM is providing national advertising for the Malibu and CTS. But Dealers still have to move the inventory on their lots.

[carscomblogger]

They feel they don't need to advertise hot new products, national is already taking care of that. People come in with no advertising for those cars. A 2008 Grand Prix (I can't believe there is an 08) hasn't been mentioned ANYWHERE besides this guy's ad and he must have a few he needs to sell. I think that makes some weird sense to me. The only dealer who won't have this problem is a Saturn dealer.

[nsap]

Originally Posted by carscomblogger

They feel they don't need to advertise hot new products, national is already taking care of that. People come in with no advertising for those cars. A 2008 Grand Prix (I can't believe there is an 08) hasn't been mentioned ANYWHERE besides this guy's ad and he must have a few he needs to sell. I think that makes some weird sense to me. The only dealer who won't have this problem is a Saturn dealer.

I can understand wanting to get rid of inventory (that begs the question..why on Earth would you stock Grand Prixs?), but it is hurting the perception change. A customer sees a local dealership advertise the 2008 Grand Prix, noticing it still looks as it has for the last four years and thinks, "hmm...GM is still making crap products."

[BVPBG]

Although I enjoy reading many of the posts and responses on this site I almost never join the discussion. This time I must.

What is the point of advertising, and how would you spend your money if you were running a dealership and a budget, you needed to sell vehicles balance inventory and pay floorplan on the cars and trucks you have in inventory.
As I am sure many of you know the highly desirable vehicles can be very difficult to come by and GM is always asking for favors in regard to inventory.

As a BPG point ( and a fairly large one) how many Acadia’s and Enclaves do you think we have been allocated? Other than to tote the corporate barge should I advertise a vehicle that already has more customers coming in to purchase than I can provide vehicles for? And by the way that are being sold in some cases with little discount and no real support from the mfg..

I agree that many of the new products are class leaders and at some point I hope that the slower moving vehicles will be fazed out or replaced with more desirable and "better" product, but until then what would you do?

Those of you who are consumers and talk about canyon or lacrosse and how and what we should stock should open your eyes. For me if the canyon no longer existed (like the Pontiac and Buick Vans) it would not affect me in the least. To inventory a vehicle that can sit for 2, 6, 9 months or more so that I can sell it at no profit is a benefit to whom?

I for one see great things happening at GM and hope that someday I won't need to advertise blow-out deals on old 2nd class product but until then we still need to run a business and if we are not profitable who will be around to sell and survive your favorite American cars and trucks

Sorry if I am all over with this but there are so many things to say that I could write all day on any one of these subjects