On the Blacktop

[Guest buickman]

Sore Dealer Sounds Off

Mac Gordon

Ward's Dealer Business, Jul 1, 2006 12:00 PM

A West Coast Buick-Pontiac-GMC dealer, with an interest in a foreign brand near his main showroom, agreed to a candid discussion with Ward's Dealer Business. His identity is withheld, except to note the dealership's roots in an affluent suburb date to 1960.

WDB: How's business?

Terrible. We once sold 60 new Pontiacs a month. Now we're lucky to sell 15. Our Buick line has been whittled down from four sedans to two, and sales have dropped accordingly. GMC sustains our profits, but now, with gas selling for $3.50 a gallon around here, Yukon SUV buyers are heading for the Japanese brands.

WDB: What is General Motors Corp. doing about it?

I really think they're into cutting down on Buick and Pontiac lineups to force us to sell out. They learned a costly lesson when they killed off Oldsmobile, having to pay those dealers millions in settlements. Turning Century-Regal into LaCrosse, and Park Avenue-LeSabre into Lucerne is a strategy for sending our loyal owners to the competition. And how can we survive the steady contraction?

WDB: But isn't Pontiac gaining hot cars like Solstice and G6?

Yes, but look at what they're dumping — established names like Bonneville and Grand Prix. We melded Buick and GMC franchises into our Pontiac stores in 1991 and 2000, before they started up with their grand scheme to dump the old brand names. And GM's market share keeps tanking as a result, being around 15% around here and on the decline.

WDB: What is GM really hoping to achieve, besides more sales and profits, and a rebound in market share?

Fewer dealers with larger territories and more sales per dealer, just like Toyota, Honda and Nissan. The trouble is that in a metro market like this one, the publicly owned megadealers have scooped up a lot of GM stores and immediately started losing customers because their CSI (customer satisfaction index) ratings are so lousy. The megadealers want volume at any cost, especially in the GM and Ford lines.

WDB: Why did you buy a foreign brand?

What GM dealer wouldn't these days? For one thing, their financing company charges less for floorplanning than GMAC (General Motors Acceptance Corp.), so we run all our inventory coverage through it. And my store is selling 30 to 40 new cars a month, without incentives or thinner margins.

WDB: What else do you see that GM has done wrong?

Well, starting with (former GM president-North America) Ron Zarrella's efforts to buy up metro market stores, it's been like a rollercoaster. Now they're off incentives and into “market prices,” another squeeze-down on our margins.

They're insisting that dealers buying franchises to form a Buick-Pontiac-GMC threesome sign an exclusivity agreement, preventing addition of a non-GM franchise if one of the trio is dropped. I could go on, but all my owners see for GM is the “B” (bankruptcy) word and getting GM back on the screens of westerners is going to be a struggle I don't see them winning.

WDB: Wouldn't other dealers see this as sour grapes?

They might. But most of the GM dealers in this state took a secret vote, and most thought (or hoped) GM would be acquired by Toyota. Hey, they could get it for a market cap of $18 billion, which is chicken feed for Toyota.

WDB: Why would Toyota want GM?

To pick up 20%-25% market share on the cheap, without seeing GM go belly-up and all its workers terminated. They're already partners in the Fremont (California) plant, and I'm positive a takeover of GM by Toyota is going to happen.

Mac Gordon is the dean of U.S. automotive writers. He is at [email protected].

[enzl]

Sore Dealer Sounds Off

Mac Gordon

Ward's Dealer Business, Jul 1, 2006 12:00 PM

A West Coast Buick-Pontiac-GMC dealer, with an interest in a foreign brand near his main showroom, agreed to a candid discussion with Ward's Dealer Business. His identity is withheld, except to note the dealership's roots in an affluent suburb date to 1960.

Mac Gordon is the dean of U.S. automotive writers. He is at [email protected].

164183[/snapback]

Although this 'interview' may be entirely accurate, I can't give any credit to blind item reporting. The 'Dean' of US autowriters should be able to find a name source and put them on record...

[-Camaro-]

I'd protest in Japan about a takeover if Toyota did take GM. Can you say Monopoly?

Edited July 8, 2006 by -Camaro-

[evok]

I thought for the most part the article was accurate though coming from the perpective of a dealer.

GM has too many dealers as a result GM dealers as individual entities must wake up because they need to consolodate just like the rest of automotivdom.

Any dealer that does not see that will have to close up shop. In many ways that would be good for GM and the rest of the dealer body.

Also the combined GMC-B-P dealer store is very good and ultimately will help the dealer.

As the market swings back and forth in vehicle type prefences the dealer can capitalize on those swings. i.e. Fullsize car sales died because of suvs, hence it does not make sense to offer 4 Buick sedan brands. But if the dealer can pick up that volume in Envoys and Yukons it make the sales network stronger. This also allows GM to invest in the brands where the market is strong without forcing the dealer to sell badge engineered product because the dealer is screaming for product. We are in another market swing because of fuel cost. Holes can be plugged in the combined dealer by Pontiac and Buick offering smaller vehicles.

[Guest buickman]

I thought for the most part the article was accurate though coming from the perpective of a dealer.

GM has too many dealers as a result GM dealers as individual entities must wake up because they need to consolodate just like the rest of automotivdom.

Any dealer that does not see that will have to close up shop.  In many ways that would be good for GM and the rest of the dealer body.

Also the combined GMC-B-P dealer store is very good and ultimately will help the dealer.

As the market swings back and forth in vehicle type prefences the dealer can capitalize on those swings. i.e. Fullsize car sales died because of suvs, hence it does not make sense to offer 4 Buick sedan brands. But if the dealer can pick up that volume in Envoys and Yukons it make the sales network stronger.  This also allows GM to invest in the brands where the market is strong without forcing the dealer to sell badge engineered product because the dealer is screaming for product.  We are in another market swing because of fuel cost.  Holes can be plugged in the combined dealer by Pontiac and Buick offering smaller vehicles.

164284[/snapback]

You are without a doubt a corporate suck ass.

[evok]

Now...well if I were a consultant to GM dealers I would be honest with them and tell them exactly what the situation is.

[Drew Dowdell]

WDB: What is General Motors Corp. doing about it?

I really think they're into cutting down on Buick and Pontiac lineups to force us to sell out. They learned a costly lesson when they killed off Oldsmobile, having to pay those dealers millions in settlements. Turning Century-Regal into LaCrosse, and Park Avenue-LeSabre into Lucerne is a strategy for sending our loyal owners to the competition. And how can we survive the steady contraction?

Except that the LaCross and Lucerne are substantially better than the pairs of cars they respectively replaced. How is turning a Century or Regal into a LaCross going to send loyal owners to the competition? What better time to upgrade from that doudy Century to a new Lacross? You can get your Lucerne in V8 trim instead of just s/c V6.

I haven't checked recently, but aren't the new sedans outselling their pairs of predecessors anyway?

WDB: But isn't Pontiac gaining hot cars like Solstice and G6?

Yes, but look at what they're dumping — established names like Bonneville and Grand Prix. We melded Buick and GMC franchises into our Pontiac stores in 1991 and 2000, before they started up with their grand scheme to dump the old brand names. And GM's market share keeps tanking as a result, being around 15% around here and on the decline.

Bonneville... oh yeah, there was a big seller. Do you think we'd be having this conversation if this were DCX and Dodge just dumped Intrpid for Magnum and Charger? Sure, you're losing Bonneville, GTO and GrandPrix, but you're gaining G8 and a new GTO, both of which look to be substantially superior even at this early stage.

WDB: What is GM really hoping to achieve, besides more sales and profits, and a rebound in market share?

Fewer dealers with larger territories and more sales per dealer, just like Toyota, Honda and Nissan. The trouble is that in a metro market like this one, the publicly owned megadealers have scooped up a lot of GM stores and immediately started losing customers because their CSI (customer satisfaction index) ratings are so lousy. The megadealers want volume at any cost, especially in the GM and Ford lines.

I'll give him this one. The GM mega-center is just a few miles away from my house and does sell Cadillac. Due to the very poor service from them, I drive 20 miles north to a Cadillac "boutique" dealer where I purchased and service my car. I much prefer the service of a single brand dealer to the megadealer. Plus, the deals are no different.

[Guest buickman]

Except that the LaCross and Lucerne are substantially better than the pairs of cars they respectively replaced.  How is turning a Century or Regal into a LaCross going to send loyal owners to the competition? What better time to upgrade from that doudy Century to a new Lacross? You can get your Lucerne in V8 trim instead of just s/c V6.

I haven't checked recently, but aren't the new sedans outselling their pairs of predecessors anyway?

Bonneville... oh yeah, there was a big seller. Do you think we'd be having this conversation if this were DCX and Dodge just dumped Intrpid for Magnum and Charger?  Sure, you're losing Bonneville, GTO and GrandPrix, but you're gaining G8 and a new GTO, both of which look to be substantially superior even at this early stage.

I'll give him this one. The GM mega-center is just a few miles away from my house and does sell Cadillac. Due to the very poor service from them, I drive 20 miles north to a Cadillac "boutique" dealer where I purchased and service my car. I much prefer the service of a single brand dealer to the megadealer. Plus, the deals are no different.

164316[/snapback]

You sir, are a reasonable, rational individual who doesn't just go along for the ride. You pose questions and ask worthwhile questions. I appreciate your independence and willingness to take an open minded viewpoint. Your bud, evok, on the other hand is undoubtedly prejudiced. Keep the faith.

Buickman

[evok]

Thanks, Oldsmoboi. You save me the trouble of disputing some of the assertions in the BMs, article. In particular those relating to the product. I was going to use the examples you mentioned.

[haypops]

Your bud, evok, on the other hand is undoubtedly prejudiced. Keep the faith.

Buickman

164319[/snapback]

Buickman calling someone else prejudiced is so like the kettle calling the pot black.

I do, however, have to give BM credit for posting an article that blames Zarilla by name rather than Wagoner. Priceless.

[ShadowDog]

Also the combined GMC-B-P dealer store is very good and ultimately will help the dealer.

164284[/snapback]

It's only worked for decades in Canada.

[Northstar]

Turning Century-Regal into LaCrosse, and Park Avenue-LeSabre into Lucerne is a strategy for sending our loyal owners to the competition.

Both the LaCrosse and Lucerne are far superior to the vehicles they replaced, and the Regal was just a fancy Century anyways. The PA barely sold anything at the end of its life.

Yes, but look at what they're dumping — established names like Bonneville and Grand Prix.

Bonneville didn't sell that well anyways, and a new one would just compete against the Lucerne. Grand Prix is still around.

I'm positive a takeover of GM by Toyota is going to happen.

It could happen, but it won't. If he had a clue he'd realize Toyota doesn't want any of GM's problems. If GM does go belly up, it just means more sales for Toyota anyways.

[buyacargetacheck]

As aggressive as Toyota, Honda and Hyundai are, how much longer can GM keep up this illusion that Pontiac and Buick are relevant? There's nothing PBG sells that couldn't be sold at Chevrolet. Which is what Pontiacs and Buicks are anyway (with the exception of the in-a-shrinking-segment-and-ancient G Lucerne): Chevrolets. This dealer would be wise to cash out his dealership to a greater fool. Pontiac, Buick and, likely, the Saturn distraction are raisins (plump fruit that withered on the vine too long).

[ehaase]

This dealer would be wise to cash out his dealership to a greater fool. 

164538[/snapback]

Automotive News had an article several months ago about dealerships where the land was more valuable than the business. This is common where real estate is valuable and scarce, like California and Florida, and some dealerships are being sold and the land is being converted to condos.

[regfootball]

I thought for the most part the article was accurate though coming from the perpective of a dealer.

GM has too many dealers as a result GM dealers as individual entities must wake up because they need to consolodate just like the rest of automotivdom.

Any dealer that does not see that will have to close up shop.  In many ways that would be good for GM and the rest of the dealer body.

Also the combined GMC-B-P dealer store is very good and ultimately will help the dealer.

As the market swings back and forth in vehicle type prefences the dealer can capitalize on those swings. i.e. Fullsize car sales died because of suvs, hence it does not make sense to offer 4 Buick sedan brands. But if the dealer can pick up that volume in Envoys and Yukons it make the sales network stronger.  This also allows GM to invest in the brands where the market is strong without forcing the dealer to sell badge engineered product because the dealer is screaming for product.  We are in another market swing because of fuel cost.  Holes can be plugged in the combined dealer by Pontiac and Buick offering smaller vehicles.

164284[/snapback]

exactly. best post i've seen in a long long time. the dealers must consolidate just like the plants, marketing, everyone.

f'ing dealers think the world revolves around their hairy assholes. the guy they interviewed doesn't 'get it'. IT'S ABOUT THE CUSTOMER YOU ASSWIPE!!!! No wonder people hate salesmen and dealers......its about the CUSTOMER, NOT THE DEALER OWNER, OR SALES MANAGER OR THE POOR GUY MAKING MAYBE 100 BUCKS ON THE CAR.

[regfootball]

Any dealer that does not see that will have to close up shop.

164284[/snapback]

again, WORD. evolve or die. some day we'll all be ordering our cars off the internet, after we take our test drives from the mall parking lot. I would be plenty fine cutting off the cash flow to all the 'middle men'.

Edited July 9, 2006 by regfootball

[regfootball]

Automotive News had an article several months ago about dealerships where the land was more valuable than the business.  This is common where real estate is valuable and scarce, like California and Florida, and some dealerships are being sold and the land is being converted to condos.

164546[/snapback]

so my company can build em! YES!

[Mr.Krinkle]

sounds like some facts thrown in with the usual bm propaganda. i guess id be a bit paranoid too if i sold gm cars in cali. if thats even where this really was.

im still gonna hold off calling these brands raisins...perhaps they were grapes and have been fermenting.

same old story with olds keeps coming up though.

for all the time people said change was on its way its only just lately it seems like more than a grain of salt. time is still a tickin but i dont see the need to completely abolish said brands.

maybe they did learn a lesson from olds and this is plan b.

Edited July 10, 2006 by Mr.Krinkle

[Chicagoland]

Funny how some claim that cutting the Regal and PA cut sales. Wasn't the Regal down to like 8000 a year? [sarcasm]

If dropping old names is bad, why didn't Buick die in 1959, when they had all new names? Why didn't the 1973 Cnetury bomb since it replaced the 72 Skylark? And Buick for sure should have died when the Electra name was killed right?

This 'interview' seems as fake as the "Elvis is alive", and "Jon Benet Ramsey was killed by XXX" stories at the checkout lane.

Edited July 10, 2006 by Chicagoland

[balthazar]

Well, Buick was in 5th place in '58, 7th in '59 and 9th in '60, so a case could be made for the names having notable effect (I only believe it to a minority extent). The Special of '61 is what began turning things around; an entirely new segment.

I wonder if the dealer interviewed up top ever sells as many 'foreign brand' cars a month as he sold Pontiacs in the past. Since he seems to think everything's the same from 'then' to now except the Pontiacs...