GM Marketing Maven Mark LaNeve is changing his tune faster than a short-circuited juke box. Yesterday, speaking to Automotive News [AN sub], GM's Marketeer outlined the idea of creating metro superstores. LaNeve said he'd run the concept up the proverbial flagpole at the annual National Auto Dealers Association (NADA) convention next month. When the story appeared, LaNeve saw that no one was saluting it. In fact, dealers were firing Howitzers at the damn thing. So Marketing Mark sent a polite message to dealers (and AN) stating "there will be no announcements of any kind regarding any new initiative or change to our channel strategy." In classic GM what-you-thought-you-heard-wasn't-what-I-should-have-said style, LaNeve claimed that the AN story "gave the impression of a major policy announcement of shift in strategy." On the other hand, he also said GM is discussing the cost of real estate in prime markets and the inclusion of "more than one" brand at some locations. What LaNeve didn't say was how many irate phone calls and emails he received from NADA members threatened by his metro megastore misegos.
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Wouldn’t the more successful dealers welcome this? Maximize their real estate, offer a range of brands, all with a smaller front and back end staff and less capital?
I suppose it all comes down to numbers — likely the top 10% of dealers (100’s) are too few to overcome the resistance of the mass (1000’s).
A much better solution is this: Instead of just cutting dealers and combining them into mega stores GM should SERIOUSLY cut the number of divisions. Start with Saturn and go up the corporate food chain to either Pontiac or Buick and put one of those divisions out to pasture.
And Red dawg how does one one close Saturn? How much would GM pay in lawsuits.
What a pity. The more Superstores, the easier it would be for GM to pull the plug on its unproductive brands.
More on-again, off-again from GM flacks. Even allowing for this superstore initiative being a possible trial balloon, it just adds more weight to the argument that GM hasn’t a clue which direction it’s going in. Sometime in the future after GM files, I can see an economics class using GMNA as a textbook example of how NOT to run a company.
The Mega-Store idea is one more attempt at reducing the number of dealers, models and potentially brands. Given the number of various GM dealers and the volume of sales by the separate brands, you’d think that some of these stores would go out on their own. For instance, how can a Buick dealer survive on only 5 sales per month, which I read somewhere is the average volume for that brand.
“how does one one close Saturn?”
Easy, bring back the Ion :).
Seriously though, killing off the irrelevant GM brands can be done very simply by giving each brand one vehicle to sell and then not refreshing it. Stop all advertising for the brand. Isuzu has used exactly this strategy to get out of the passenger car and truck market in the US and it is working for them. Have you seen an Isuzu dealer lately?
Instead GM has been diluting it’s resources by trying to put a chicken in every pot. The Aura launch should have been the Malibu launch! Chevy still has significant mindshare in the US. Saturn is a perennial also ran with mindshare somewhere down there with Mitsubishi.
I guess we know who runs the company now. They don’t even have enough backbone to stand there ground and try something that might actually work, aligning the branding problems and weeding out the product overlap over time, as well as provide a unified dealer approach and better overall sales and service. If the guys at the top can’t even make a simple experiment happen how can they possible save the company and provide defined marching orders for the rest of the companies future.
Have you seen an Isuzu dealer lately? There is a Buick/GMC/Isuzu dealer a 1/2 a mile down the road from our office. Selling GMC Canyons and the IDENTICAL Isuzu i-whatever side by side and I mean right next to eachother.
Instead GM has been diluting it’s resources by trying to put a chicken in every pot. Like I said the dealers run the company not the execs. Whine that you need xyz product from some other brand so you can sell it and you will get you badge version of it.
Saturn would be my choice to close as well. They just got a whole bunch of new product and it all bombed. They doubled the number of models and sales only went up 6%. GM can’t afford performance like that. They will probably have to pony up the billion dollars to buy out all the Saturn dealers. I don’t think they can go the Isuzu route and just freeze them out (too many dealers, many of which also own dealerships for other GM brands, etc.); they will have to do another buy out like Oldsmobile. In fact, Saturn, if it really needed to exist at all, should have been a Scion-like sub-brand of Oldsmobile in the first place. Oh well.
So if the Isuzu strategy works, why hasn’t it been implemented?
Just curious…. are Saturn dealerships owned by GM? I ask because I’m not sure how GM could have found a franchise owner willing to purchase a no-haggle dealership.
If GM owns the dealerships, then they can close them.
Megastores are great idea IF GM would streamline the vehicle lineup. A megastore would make it unnecesasry to create three mid size sedans(Malibu, G6, Aura). The only reason sells G5 and G6 models is so the PBGMC dealer chain has Chevy’s to sell(albeit badged as Pntiacs with truly crappy interiors).