General Motors is threatening to go to court to stop some dealers from displaying GM vehicles next to competitive products on the same dealership showroom floor.
GM's opposition to sharing showroom space stems from other automakers — namely Koreans — offering dealership sales personnel cash incentives. That's in addition to their typical retail commissions, says Bill Lovejoy, vice president, GM North America Sales, Service and Marketing.
“So even if you went in and said, ‘I want that GM product,’ the salesman is trying to convince you to take the other product because he's getting the $300 commission over and above his normal commission,” says Mr. Lovejoy.
He adds, “I don't blame them. If I were a salesman, I'd do the same thing.”
GM told its dealers last year that if they had other products on their showroom floors, the automaker would contest it — and even go to court if the situation persisted, says Mr. Lovejoy.
In 2000, about 155 dealerships in the U.S. featured showrooms with GM products alongside competitive vehicles. About 130 stores have stopped doing that since GM began complaining and threatening.
Most of the dealerships are keeping the competitors' vehicles on site. But showrooms are now clearly divided, and entrances separate.
As for the 25 or so hold-outs who still do the side-by-side display of competing products, “we're going to get involved in some litigation,” Mr. Lovejoy vows.
Of GM's own practice of providing its salespeople with extra cash to move metal, Mr. Lovejoy says it is only to help Oldsmobile dealerships retain valued sales personnel as the brand is phased out during the next few years.