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].
