Interesting discussion at work

[Newbiewar]

Well today, I was inquiring about an 07 Z06 for a friend of mine... because 06's were sold out he wasnt able to get one... 07's are sold out as well but... i asked about how much profit the 06's had, and if the 07's were the same... while, not sure about the exact price, it was a good comission... but apparently the price on the 07 is going up, but likewise, the invoice is going up more then the msrp...

and this sparked an interesting discussion... while "total value promise" sounds good to the customer, sounds good to GM, it sounds horrible to the salesperson...

Every model had a reduction in base MSRP for the year 2006...

and now i've started looking over our sales... if an Aveo were to be sold at full sticker, the full profit is around 600$...

and it doesnt get much better for the other vehicles...

but on many occation's... i've seen the sales staff here, my managers, just shrug off customers because of these newly priced vehicles...

example, a customer wants to get the aveo, cobalt, maybe even a malibu or impala... what incentive is it for the salesperson if he's going to spend 3-5 hours with the customer, and at the end of negotiation(and reduction in price), the salesperson has spent more money on refreshments for the customers then he will receive for selling the vehicle...

this makes me think, how effective is this new pricing stratagy? how many customers are getting poor treatment, because there is little incentive for the salesforce to push the small vehicles? and is this why the small vehicles arent effective for GM?

[Guest buickman]

Well today, I was inquiring about an 07 Z06 for a friend of mine... because 06's were sold out he wasnt able to get one... 07's are sold out as well but... i asked about how much profit the 06's had, and if the 07's were the same... while, not sure about the exact price, it was a good comission... but apparently the price on the 07 is going up, but likewise, the invoice is going up more then the msrp...

and this sparked an interesting discussion... while "total value promise" sounds good to the customer, sounds good to GM, it sounds horrible to the salesperson...

Every model had a reduction in base MSRP for the year 2006...

and now i've started looking over our sales... if an Aveo were to be sold at full sticker, the full profit is around 600$...

and it doesnt get much better for the other vehicles...

but on many occation's... i've seen the sales staff here, my managers, just shrug off customers because of these newly priced vehicles...

example, a customer wants to get the aveo, cobalt, maybe even a malibu or impala... what incentive is it for the salesperson if he's going to spend 3-5 hours with the customer, and at the end of negotiation(and reduction in price), the salesperson has spent more money on refreshments for the customers then he will receive for selling the vehicle...

this makes me think, how effective is this new pricing stratagy? how many customers are getting poor treatment, because there is little incentive for the salesforce to push the small vehicles?  and is this why the small vehicles arent effective for GM?

<{POST_SNAPBACK}>

Excellent point, you can't make any money selling small cars, even at full MSRP. GM had prostituted the market through their lack of understanding of retail. All Value Pricing has been is a way to screw the dealers and customers. They only reduced dealer margin, didn't really cut prices.

Buickman

Edited June 28, 2006 by buickman

[Newbiewar]

Excellent point, you can't make any money selling small cars, even at full MSRP. GM had prostituted the market through their lack of understanding of retail. All Value Pricing has been is a way to screw the dealers and customers. They only reduced dealer margin, didn't really cut prices.

Buickman

they give us less room to absorb negative equity or get people qualified who dont want to put money down...

[haypops]

Don't take this the wrong way but no one expressed much sympathy for the workers who screw these cars together, or for the engineer and other white collar workers who have their jobs outsourced to Korea. These are very hard times and few people are willing to face it.

Tim on another matter ... I heard that GM's contracted car hauler (allied I think) was having problems paying there bills. As a consequence owner operators weren't delivering and attempts to get other carriers to cover for them were marginal at best. Supposedly some cars ordered by dealers were taking up to 30 days to get from the rail head to the dealer (Southern California). Have you seen anything like this at your store?

[Newbiewar]

Don't take this the wrong way but no one expressed much sympathy for the workers who screw these cars together, or for the engineer and other white collar workers who have their jobs outsourced to Korea.  These are very hard times and few people are willing to face it.

Tim on another matter ... I heard that GM's contracted car hauler (allied I think) was having problems paying there bills.  As a consequence owner operators weren't  delivering and attempts to get other carriers to cover for them were marginal at best.  Supposedly some cars ordered by dealers were taking up to 30 days to get from the rail head to the dealer (Southern California).  Have you seen anything like this at your store?

not heard anything like that, there was problems last year after katrina and the Emloyee discount because lots were empty, and the rail roads were being used for construction...

but our warehouse is only like 1 mile from the train depot...

i feel sorry for those people who had their jobs outsourced, but... honnestly, the American way of getting a discount and getting cheaper prices, is ruining America...

here... we are one of GM's top dealerships, and they take care of us as much as they can... but still... the consumer is now confused... due to the new pricing stratagy, the customers end up leaving frusterated... the consumer is used to 2-3k$ discounts on small cars and 5k+ discounds on the big guys... but in reality... its not possible anymore...

[CARBIZ]

Wow, things must be worse down there. I had my best month in 4 years during employee pricing. The Aveo is certainly not our highest grossing vehicle, but if we can hold to sticker we do okay.

I would kill to sell one Vette a year. The Vette market is dead up here. $70,000 is too much money.

Our dealer has to survive on Aveos, Malibus, Cobalts and Uplanders. We've sold 2 Tahoes since they came out! We sold maybe 5 Corvettes this year.

That is our reality. Dealers that used to sell 60 vehicles on a Saturday are now selling 50 in a MONTH.

I missed the good ol' days when having a Chevrolet/Olds franchise (in Canada) was a license to print money. Now, with the Buick/Pontiac dealers having the Vibe (we never did) and getting the Aveo (Wave), Cobalt (Pursuit) and even the Torrent, plus having 2 convertibles to sell and the entire Buick line - we are getting crucified.

Thank God for the Aveo and Uplander because I have lost many customers who had Olds Intrigues and Aleros. Some of them went to Buick, but most just bought out their leases.

I don't know what salesmen make in California, but up here NOBODY is making 6 figures any more. I know salepeople who have been in the business 20 years who used to sell 20 Olds/Chevs a month and now sell 8. Cars and insurance are very expensive up here. I have been told by several insurance agents that due to the losses from "new Canadians" we now pay the highest insurance premiums in North America, too. $2,400 for a Cobalt would be a good rate. $5,000 is not unheard of.

Take them apples!

[Newbiewar]

Wow, things must be worse down there. I had my best month in 4 years during employee pricing.  The Aveo is certainly not our highest grossing vehicle, but if we can hold to sticker we do okay.

  I would kill to sell one Vette a year. The Vette market is dead up here.  $70,000 is too much money.

  Our dealer has to survive on Aveos, Malibus, Cobalts and Uplanders.  We've sold 2 Tahoes since they came out!  We sold maybe 5 Corvettes this year.

  That is our reality.  Dealers that used to sell 60 vehicles on a Saturday are now selling 50 in a MONTH. 

  I missed the good ol' days when having a Chevrolet/Olds franchise (in Canada) was a license to print money.  Now, with the Buick/Pontiac dealers having the Vibe (we never did) and getting the Aveo (Wave), Cobalt (Pursuit) and even the Torrent, plus having 2 convertibles to sell and the entire Buick line - we are getting crucified. 

  Thank God for the Aveo and Uplander because I have lost many customers who had Olds Intrigues and Aleros.  Some of them went to Buick, but most just bought out their leases.

  I don't know what salesmen make in California, but up here NOBODY is making 6 figures any more.  I know salepeople who have been in the business 20 years who used to sell 20 Olds/Chevs a month and now sell 8.  Cars and insurance are very expensive up here.  I have been told by several insurance agents that due to the losses from "new Canadians" we now pay the highest insurance premiums in North America, too.  $2,400 for a Cobalt would be a good rate.  $5,000 is not unheard of.

  Take them apples!

personally i've sold 2 corvettes this year, and i've probably sold 20-30 new tahoes...

as a dealerhsip we've already gone through about 400 2007 year model vehicles already...

but as for the uplanders, they dont sell at all, the cobalts sell okay, impala's i've sold one or two, malibu i've sold maybe 1...

but our store is focused on full size...

as for incomes... we're top sales for southern california, and our top salesperson for 2005 made around 81k... and yes Employee discounts were the best months... we went from 300 cars per month to 550 cars per month... until we ran out of stock... we are still catching up...

[CARBIZ]

Wow. The #1 store in Canada can barely sell 100 retail a month now. One of our leasing managers told me a few years ago that when she started (in the late '70s), we would routinely sell 50+ vehicles on a Saturday.

We only sold 45 units last month! Of course, now we have about 12 salespeople total and back then there were 22 NEW salespeople and about 5 managers.

Losing Oldsmobile hasn't helped. We've lost a lot of customers because Chevrolet just doesn't have anything for them. ( I mean, what would you do when your Aurora lease is up? Impala?????)

GM has 41 dealers in the GTA; Toyota has 12 or 13. We are selling the same number of vehicles.

I saw an ad from one of the local dealers yesterday, advertising the Malibu LS for $16,999. The GM ads have been calling for $19,999. There are some temporary "under the radar" credits on the car, but instead of trying to make some money this dealer (who sold 38 vehicles last month) is panicking and trying to cut everyone else's throat.

This is not good for the customer, not good for GM and certainly not good for the dealers.

I read that GM is shedding 30,000 jobs. Equally importantly, GM needs to shed about 30% of its dealers. In Canada at least, all brands should be under one roof. There just isn't the market to compete against Pontiac when there are 5 Pontiac stores in a 4 or 5 mile radius.

I don't know how GM can do that. Olds cost them billions. There are a lot of fat, rich dealers out there who won't go away easily.

But it has to happen. Nobody is making money up here.

Our sister Toyota store sells more on a Saturday than we do in a month.