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Discussion Starter #1
We are totally sold on the 2017 Volt, but the 3 dealerships in our area have tried to talk us out of buying one, have denied that a 2016/17 model exists, and have tried to convince us to buy in-stock cars instead of custom-ordering what we want.

All of this points to the elephant in the room for the US auto industry - their distribution model is stuck in the early 20th century. To get straight to my point - GM needs to consider buying out their dealership franchises and turn them into GM customer service and sales centers, with all the employees working directly for GM.

While I'm not a big Apple fan myself, I have to admire the success of their "Apple Stores". Without the multi-tiered supply chain, delivering customer service is much easier when everyone's priorities are aligned. Since the Apple Stores and the Apple manufacturer are one and the same, there isn't conflict over value capture like there is when GM wants us to buy their innovative new vehicles but their dealers want to steer the market towards what they're familiar with, have purchased inventory of, and what they know will drive their portion of the profits (high maintenance/repairs).

Moving towards a GM-run supply chain would improve customer satisfaction with pricing while at the same time allowing for larger profit margins. Nobody like negotiating over price, especially knowing that the salesman's livelihood is dependent on his commission on the handful of cars he sells this month. On one hand you don't want to be the sucker overpaying, and can easily pit one dealer against the other, armed with actual costs from the internet. On the other hand you feel sorry for the salesman - you don't feel like he's your partner in the purchase, but rather pity him more as a panhandler you're supporting. Also consider that those who can least afford to pay more are those who are least equipped to negotiate well.

Cars are major capital investments worthy of considerable thought and research, and so it isn't unreasonable in most cases for customers to wait 6-8 weeks for delivery of their new car, especially if the car will be exactly what they wanted. Most industries have moved to lean manufacturing, where inventory levels are minimized for better quality control and to produce a supply commensurate with consumer demand. The "dealer stock" which we are pressured to purchase from has no business existing in the 21st century. Not only does having a standing inventory impose a financial cost to dealerships, but there is the risk of damage, theft, obsolescence, and many other liabilities. The pricing games that occur due to inventory whips also cause consumers to hesitate on purchases, even when they have decided on what vehicle they wish to purchase.

Control is another argument for centralizing dealership ownership. Obviously, attitudes and the communicated message across dealerships is not the same - as evidenced by the people who have placed orders for 2017 Volts while I am being told they don't exist. Quality control over the customer service experience can be a formidable tool in maintaining customer loyalty - look at the example of Apple stores. If I felt confident that the pricing quality of service I would receive at any given Chevy dealership was consistent, I would be more inclined to seek out a Chevy dealership for repairs, maintenance, etc, even if the price were slightly higher than if I shopped around third-party mechanics. Customers could feel more comfortable in pulling the trigger on a purchase if they weren't hung up on games over pricing differences between dealerships.

I am aware that strong laws were put into place to prevent the major manufacturers from screwing over their franchisees. But perhaps it is time that the big auto makers take a big step forward and merge with them in a mutually beneficial arrangement.
 

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Nice write-up, Max. Saturn had standardized pricing. Worked for awhile. What happened?? My thought is to leave the dealer model in place, but pull all EV/EREV service into regional service centers where practical.
 

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Ive said this for years! Auto manufactures can have a bad dealership ruin their brand image. The Manufactures should own the dealerships. That's the only way to insure the quality of the buying experience and to make sure service techs have the latest training and tools.
 

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We are totally sold on the 2017 Volt, but the 3 dealerships in our area have tried to talk us out of buying one, have denied that a 2016/17 model exists, and have tried to convince us to buy in-stock cars instead of custom-ordering what we want.

All of this points to the elephant in the room for the US auto industry - their distribution model is stuck in the early 20th century. To get straight to my point - GM needs to consider buying out their dealership franchises and turn them into GM customer service and sales centers, with all the employees working directly for GM.

While I'm not a big Apple fan myself, I have to admire the success of their "Apple Stores". Without the multi-tiered supply chain, delivering customer service is much easier when everyone's priorities are aligned. Since the Apple Stores and the Apple manufacturer are one and the same, there isn't conflict over value capture like there is when GM wants us to buy their innovative new vehicles but their dealers want to steer the market towards what they're familiar with, have purchased inventory of, and what they know will drive their portion of the profits (high maintenance/repairs).

Moving towards a GM-run supply chain would improve customer satisfaction with pricing while at the same time allowing for larger profit margins. Nobody like negotiating over price, especially knowing that the salesman's livelihood is dependent on his commission on the handful of cars he sells this month. On one hand you don't want to be the sucker overpaying, and can easily pit one dealer against the other, armed with actual costs from the internet. On the other hand you feel sorry for the salesman - you don't feel like he's your partner in the purchase, but rather pity him more as a panhandler you're supporting. Also consider that those who can least afford to pay more are those who are least equipped to negotiate well.

Cars are major capital investments worthy of considerable thought and research, and so it isn't unreasonable in most cases for customers to wait 6-8 weeks for delivery of their new car, especially if the car will be exactly what they wanted. Most industries have moved to lean manufacturing, where inventory levels are minimized for better quality control and to produce a supply commensurate with consumer demand. The "dealer stock" which we are pressured to purchase from has no business existing in the 21st century. Not only does having a standing inventory impose a financial cost to dealerships, but there is the risk of damage, theft, obsolescence, and many other liabilities. The pricing games that occur due to inventory whips also cause consumers to hesitate on purchases, even when they have decided on what vehicle they wish to purchase.

Control is another argument for centralizing dealership ownership. Obviously, attitudes and the communicated message across dealerships is not the same - as evidenced by the people who have placed orders for 2017 Volts while I am being told they don't exist. Quality control over the customer service experience can be a formidable tool in maintaining customer loyalty - look at the example of Apple stores. If I felt confident that the pricing quality of service I would receive at any given Chevy dealership was consistent, I would be more inclined to seek out a Chevy dealership for repairs, maintenance, etc, even if the price were slightly higher than if I shopped around third-party mechanics. Customers could feel more comfortable in pulling the trigger on a purchase if they weren't hung up on games over pricing differences between dealerships.

I am aware that strong laws were put into place to prevent the major manufacturers from screwing over their franchisees. But perhaps it is time that the big auto makers take a big step forward and merge with them in a mutually beneficial arrangement.

Make sure GM hears about it. Name dealerships.

Actually, shame them here too. They're not worth protecting.
 

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Well said. I fully agree it is long past time to dump the dealership model. Dealers are focused on one thing... and that isn't enhancing customer experience or maximizing GM's image. Once the buck has been taken, so has the customer.
 

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Worked for awhile. What happened??
What happened is the constant internal ankle-biting by the other GM divisions, and in time, the decision of GM's "leadership" to turn Saturn into just another badge-engineered marque by importing Opels and slapping Saturn logos on them. Everything after that was a slow death IMHO.

RIP "real" Saturn, 1985-1999.
 

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If anyone wants to do something about it, there's an FTC hearing in 8 days to go over these franchised dealership protectionist laws. Here's the details: https://www.ftc.gov/news-events/eve...uto-distribution-current-issues-future-trends

Feel free to either attend in person in DC or submit a public comment. The FTC has already publicly stated these protectionist laws need to be done away with to unlock true competition among manufacturers and not screw over the consumer because of a the dealerships' "gentleman's agreement". It's a sleazy part of our culture that needs to be done away with. As a consumer that has purchased many new vehicles from franchised dealerships and one new one direct from the manufacturer, it's painfully clear whose interest these laws have in mind.
 

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The reason they are trying to talk you into buying an in-stock vehicle is they know that if you walk off the lot without buying, you are far less likely to go back.
 

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Discussion Starter #9
Well said. I fully agree it is long past time to dump the dealership model. Dealers are focused on one thing... and that isn't enhancing customer experience or maximizing GM's image. Once the buck has been taken, so has the customer.
I understand that they're a business and want to make money - we can't expect them not to concentrate on what maximizes their profit. But the current model doesn't align profit with consumer interests. I personally would rather have a set price for a given car model, test-drive a demo model at a local dealership, but be able to custom-order. That way everybody is paying for having the dealership around, instead of some customers paying way too much while others squeeze the dealership for $200 over actual cost. And the dealerships being dependent on after-market services for their livelihood isn't a recipe for them pushing better-quality car models that don't require as much maintenance and repairs. Bargain-seekers can buy last year's demo car when the new one comes, but otherwise there wouldn't be a custom-order versus buy-what-we-stocked price game, with the dealerships not wanting to deal with someone who wants to negotiate them down to a few hundred over actual cost for a custom order.
 

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Discussion Starter #10 (Edited)
GM always blames consumers for pushing back against change, against new and innovative cars. But really it's the dealerships that are pushing back. When I first test-drove the Volt, the dealer told me that if I drained the battery on a trip and parked it for a few days (such as a trip to an airport), it wouldn't start when I got back, I would have to get towed. They he tried to offer us a test-drive of one of their "crossovers", which are just a re-branding of the decades old, gas-guzzling SUV/minivans. That clearly was not what we wanted, the electric car that GM spent billions in research and advertising to produce and make us want, but rather what the dealership wanted us to buy to maximize their profit. There is clearly a broken link in the supply chain.
 

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MaxSmart, I have had the same experiences. And I was shopping for a 2015 Volt and all three dealerships had them on the lot so it wasn't a matter of my ordering a car I might not purchase.
I will definitely provide some input to the FTC.

Although, in all honesty, I did not run into the same anti-EV run-around from the Nissan dealers. So perhaps the problem is worse with GM than some other dealership-models.
 
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