GM DEALERS WORRIED ABOUT PROFITABILITY, FLOOR-PLAN COSTS

February 5, 2007—Dealer profitability and the high cost of floor-planning—thanks to swelled inventory and days’ supply—were the big dealer topics at the GM franchise meeting Sunday.
           
“The senior managers understand we have a lot of dealers who aren’t profitable,” said NADA franchise chair Martin NeSmith, NeSmith Chevrolet/Buick/ Pontiac-GMC, Claxton, Ga. “They want to work hard on getting better throughput,” but did not offer specifics at the meeting.

GM executives told dealers they don’t plan to force dealer closings, but will instead rely on natural attrition to lower the dealer count. “They will look at individual cases and offer assistance where appropriate,” said NeSmith.

Dealers also asked for less complicated incentives and for stronger advertising and marketing to counter customer perceptions that quality is lagging, NeSmith said. GM told dealers it plans “aggressive” ad campaigns for the Chevy Silverado and Saturn Aura.