GM Draws Support From Chevy, B-P-G Dealers for Core-Brand Strategy

Special Coverage

NADA Convention & Exposition

NEW ORLEANS – General Motors Corp. dealers on hand here at the National Automobile Dealers Assn. convention appear comfortable with the auto maker’s plan to focus on just four core brands – at least those retailers who hold franchises for the surviving marques.

GM earlier announced it would zero in on its Chevrolet, Cadillac, Buick and GMC brands, focusing most of its product-development and marketing dollars on the four nameplates. Pontiac, part of the Buick-GMC distribution network, will be culled down to a niche brand, while GM is reviewing a sale, shutdown and other possibilities for its remaining Hummer, Saturn and Saab divisions.

The auto maker reiterated those plans to dealers, many of which face an uncertain future, at a company-wide franchise meeting here Sunday.

“To be honest, I think they are going in the right direction. There are too many brands and they can’t focus on all these multi-brands,” says Andy Glockner, owner-Glockner GM Superstore in Portsmouth, OH, a fourth-generation car dealer.

“It’s obvious Chevrolet is going to be their featured, core product, and I think you’ll see a lot of continued GM “channeling” of dealers, like myself,” he says. “I think (the meeting) was very positive.”

GM still has not said specifically what it will do with the Hummer, Saturn and Saab brands, though it has indicated it has been contacted by interested buyers where Hummer and Saab are concerned.

Also unclear is whether the auto maker’s plan for Pontiac to complement Buick and GMC through the B-P-G channel will call for entry-level or sports cars to appear under the Pontiac brand.

“We got a lot of good answers, but there were still some questions (GM) could not answer in my opinion,” says Howard Bentley, who owns B-P-G franchises in Tennessee and Alabama. “But they were more honest with answers to our questions than they’ve ever been. They seem more concerned than they’ve ever been.

“They said the same thing they have been (saying), that Pontiac was going to be a niche player. But really, Pontiac has been a niche player,” he adds.

Bentley, like nearly every other dealer here, says 2008 was a difficult year for his dealerships.

“Last year was very tough. We had probably the worst year we’ve ever had, and I’ve been in business a little over 25 years,” Bentley says. “We were not profitable, but we really worked on used-car inventory, getting more selective and efficient with our used cars, and focusing on new-car inventory. We had to lay off a few people and do some pay reductions.”

In comparison, Glockner’s GM “megastore” was tracking ahead of the previous year through October. But in November and December, when the full force of the financial crisis hit, “people stopped buying because of a lack of confidence in the marketplace,” he says.

“We were down about 10% last year, which wasn’t bad. But our profitability was better than it was in 2007,” says Glockner, who credits good retention of its customer base and long-time employees for helping the dealership pull through some tough times.

Glockner’s family opened its first Chevrolet dealer in 1914. He also owns a Toyota and Honda store.

“I’m really proud of our people. We have maybe a better attitude than we did the first three quarters,” he says. “We all got a little bit ‘fat and lazy,’ and we are paying more attention to detail.

“We all know we’ll come out of this, and there will be a ton of pent-up demand. We’ll be ready for it.”

Jonathon Watson, who owns a B-P-G store in Texas, along with Toyota and Mercedes franchises, says GM is going to be his best franchise this year.

“Last week, there were two days I delivered more Buicks than I did cars at my Toyota store,” he says. “I believe what one gentleman (here) said, that the American public is going to make a special effort to look at domestics again.

“I actually made more money at my B-P-G/Mercedes store than I did at my new Toyota store (last year),” he says. “And I’m really having better traffic at my GM store than with my import stores.”

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