GM DEALERS’ MOOD UPBEAT

GM's Smith is reviewing NADA's CSI study.

February 1, 2004—At a press conference after Sunday’s GM franchise meeting, John F. Smith, North America Vehicle Sales, Service, and Marketing group vice-president, described the mood of the 2,500 attending General Motors dealers as “positive, constructive, and upbeat.”

One reason may be the regular monthly contact, which has boosted dealers’ outlook toward the automaker in recent NADA dealer attitude surveys.

On the customer satisfaction front, GM execs are still reviewing the results of NADA’s CSI study. “We feel pretty good about the length of our survey,” said Smith, though there are two key questions GM’s CSI survey does not address: How many owners come back to buy again? How many of those same owners would recommend that dealership to their friends? Even so, the survey works “for most of our dealers.”

GM’s focus this year will be on cost and quality control as well as product development, said Smith. John Middlebrook, vice-president, Marketing and Advertising, reviewed all the new vehicles coming in future months, including the Cadillac STS, Chevy Equinox, Pontiac Bonneville GXP, GMC Envoy XL and XUV with Displacement on Demand, Saturn Relay, Saab 9-2X, Hummer H2 SUT, and Buick LaCrosse.

GM, of course, will need to spend more on advertising, but the need to provide cash incentives or enhanced interest rates on its new vehicles will be scrutinized. “We’re continually looking at it segment by segment,” said Smith. “Everyone in every segment in our business is merchandising pretty heavily these days,” because many people “aren’t even buying unless they think they’re getting a good deal.” Any automaker has to have some appearance of a deal—some hold the line on price and add standard features while others put “buckets of money on the hood.”

This year also marks the end for Oldsmobile. The number of dealers has dropped from 2,802 at the phase-out announcement in 2000 to 1,400 today, said the soon-to-retire Darwin Clark, group vice-president and general manager, Industry-Dealer Affairs. And 176 have yet to reach a resolution.