Corvette, GM Mark-Up "Warning"

[90503]

I thought this was interesting. All these years we were told GM had no say or control in what dealers did with adms...now this. Not sure if it is just a feeble PR attempt or what. At least GM finally acknowledges what we have all seen for years with the Z/28 and others and now the Vettes especially...

Interesting they also are "concerned" about the new Silverados...and others. (No mention of Camaro mark-ups...lol)

Anyhow, here's the story...

https://gmauthority.com/blog/2022/01...justment-fees/

General Motors has sent a letter to its dealer body, warning them they could have their vehicle allocation redirected if they charge customers above MSRP for products like the 2023 Corvette Z06 and 2024 Chevy Silverado EV, among others.

Car dealerships will often apply so-called market adjustment fees to new vehicles that are in high demand or that may be hard to come by to increase their profit margins. In the letter sent to dealerships this week, GM said it is aware of some dealerships that have been “demanding money above and beyond the reservation amounts set in GM’s program rules and/or have requested customers to pay sums far in excess of MSRP in order to purchase or lease a vehicle.” This applies to 2023 Corvette Z06 and 2024 Chevy Silverado EV orders, but also those of all upcoming products such as the Cadillac Lyriq, the GMC Hummer EV pickup and Hummer EV SUV, the GMC Sierra EV as well as the Chevy Equinox EV and Blazer EV crossovers.

In the letter, GM said it will be “forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity,” of its brands. This could include rerouting a dealership’s 2023 Corvette Z06 or 2024 Chevy Silverado EV allocations to a more well-behaved storefront, or taking “other recourse prescribed by the Dealer Sales and Service Agreement.” It’s worth noting that GM has no legally backed way to force dealerships to sell its products for a certain price, so these retailers are not breaking the law with this practice, but are simply engaged in behavior that GM corporate finds unbecoming of the brand.

While market adjustment fees are nothing new, they have garnered more attention amid the COVID-19 pandemic and microchip shortage. With vehicle demand high and inventory levels at record lows, dealers are looking to capitalize on consumers’ desperation and squeeze high market adjustment fees. Back in July 2021, we reported on GM dealers marking up C8 Corvette units, in one case by as much as $99,516 over the car’s MSRP.

It will be interesting to see if GM’s threat to pull product allocation from certain dealerships will prevent market adjustment fees from being applied to the C8 Corvette Z06, 2024 Chevy Silverado EV and other future in-demand Cadillac, Chevy and GMC products.

(The letter...

[FarmerFran]

If it is like Ford they can basically do nothing. Another reason to like Tesla business model

[Martinjlm]

Originally Posted by 90503

I thought this was interesting. All these years we were told GM had no say or control in what dealers did with adms...now this. Not sure if it is just a feeble PR attempt or what. At least GM finally acknowledges what we have all seen for years with the Z/28 and others and now the Vettes especially...

Interesting they also are "concerned" about the new Silverados...and others. (No mention of Camaro mark-ups...lol)

Anyhow, here's the story...

https://gmauthority.com/blog/2022/01...justment-fees/

General Motors has sent a letter to its dealer body, warning them they could have their vehicle allocation redirected if they charge customers above MSRP for products like the 2023 Corvette Z06 and 2024 Chevy Silverado EV, among others.

Car dealerships will often apply so-called market adjustment fees to new vehicles that are in high demand or that may be hard to come by to increase their profit margins. In the letter sent to dealerships this week, GM said it is aware of some dealerships that have been “demanding money above and beyond the reservation amounts set in GM’s program rules and/or have requested customers to pay sums far in excess of MSRP in order to purchase or lease a vehicle.” This applies to 2023 Corvette Z06 and 2024 Chevy Silverado EV orders, but also those of all upcoming products such as the Cadillac Lyriq, the GMC Hummer EV pickup and Hummer EV SUV, the GMC Sierra EV as well as the Chevy Equinox EV and Blazer EV crossovers.

In the letter, GM said it will be “forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity,” of its brands. This could include rerouting a dealership’s 2023 Corvette Z06 or 2024 Chevy Silverado EV allocations to a more well-behaved storefront, or taking “other recourse prescribed by the Dealer Sales and Service Agreement.” It’s worth noting that GM has no legally backed way to force dealerships to sell its products for a certain price, so these retailers are not breaking the law with this practice, but are simply engaged in behavior that GM corporate finds unbecoming of the brand.

While market adjustment fees are nothing new, they have garnered more attention amid the COVID-19 pandemic and microchip shortage. With vehicle demand high and inventory levels at record lows, dealers are looking to capitalize on consumers’ desperation and squeeze high market adjustment fees. Back in July 2021, we reported on GM dealers marking up C8 Corvette units, in one case by as much as $99,516 over the car’s MSRP.

It will be interesting to see if GM’s threat to pull product allocation from certain dealerships will prevent market adjustment fees from being applied to the C8 Corvette Z06, 2024 Chevy Silverado EV and other future in-demand Cadillac, Chevy and GMC products.

Originally Posted by FarmerFran

If it is like Ford they can basically do nothing. Another reason to like Tesla business model

GM has done this for as long as I can remember. This is the first I’ve seen of them doing it publicly. The way I’ve seen it work is dealer who marks up a ZR1 way above MSRP suddenly finds that they are at the back of the line for Suburbans. Dilemma…make an easy bucket of cash on one ZR1 sale and forego several high margin Suburban sales or toe the line and keep it moving?

[shaffe]

Originally Posted by FarmerFran

If it is like Ford they can basically do nothing. Another reason to like Tesla business model

Ford sent a similar letter to dealers regarding the Mach-E and upcoming Lightning

[0stones0]

Originally Posted by FarmerFran

If it is like Ford they can basically do nothing. Another reason to like Tesla business model

No. Whatever GM or Ford are doing, it doesn’t remotely give me a “reason to like Tesla business model”. Ymmv

[FarmerFran]

The real problem is that the American Way steps in... Example

If dealers sell a car at, let's go with MSRP. There will people lined up to flip them, so why shouldn't the dealers be able to do the same? They are just dudes trying to make as much money as fast and easy as possible.

Even in my example of Tesla, buying straight from them, all you do it buy it and flip it. Happens all the time with anything that "people want - now".

Us as a people created the mess.

[Martinjlm]

Originally Posted by FarmerFran

The real problem is that the American Way steps in... Example

If dealers sell a car at, let's go with MSRP. There will people lined up to flip them, so why shouldn't the dealers be able to do the same? They are just dudes trying to make as much money as fast and easy as possible.

Even in my example of Tesla, buying straight from them, all you do it buy it and flip it. Happens all the time with anything that "people want - now".

Us as a people created the mess.

The dealer operates as the face of the company to the public. People get their perception of how the company does business based on their interactions with the dealer. If Joe Public wants to buy a car from Bob’s GM Dealer and flip it for profit that’s his right as a citizen of the US of A. If Bob the GM Dealer decides he wants a cut of this and GM says “this doesn’t fit our image and plan for the product. Stick to the Dealership Agreement” Bob needs to stick to the Dealership Agreement. Or Bob should decide that he’d rather be Bob Public instead of a GM Dealer and do whatever the heck he wants with the car. He can’t (or at least shouldn’t) be allowed to behave one way sometimes and a different way only when it suits him.

[FarmerFran]

Originally Posted by Martinjlm

The dealer operates as the face of the company to the public. People get their perception of how the company does business based on their interactions with the dealer. If Joe Public wants to buy a car from Bob’s GM Dealer and flip it for profit that’s his right as a citizen of the US of A. If Bob the GM Dealer decides he wants a cut of this and GM says “this doesn’t fit our image and plan for the product. Stick to the Dealership Agreement” Bob needs to stick to the Dealership Agreement. Or Bob should decide that he’d rather be Bob Public instead of a GM Dealer and do whatever the heck he wants with the car. He can’t (or at least shouldn’t) be allowed to behave one way sometimes and a different way only when it suits him.

But it does not say they cannot mark it up, right? it only says they cannot ask form more than XX down.

And if the dealers are the face of the company, they have a lot bigger problem than markups or large down payments.

EDIT: And I am expecting the same thing from the Audi dealer when I go in for the RS3. But the experience it top notch.

That is why a lot of my GM buddies for years said Caddy should have taken Corvette and they should be separated from the rest of GM lineup.

[FarmerFran]

duplicate

[FarmerFran]

LMFAO!!!

This is straight from AUDI website,

"MSRP Disclaimer
*Starting MSRP of $75,900 for a 2022 RS 5 Coupe quattro® with automatic transmission. European model shown. Prices exclude $1,045 destination, taxes, title, other options and dealer charges. Dealer sets actual price."

[Martinjlm]

Originally Posted by FarmerFran

But it does not say they cannot mark it up, right? it only says they cannot ask form more than XX down.

And if the dealers are the face of the company, they have a lot bigger problem than markups or large down payments.

EDIT: And I am expecting the same thing from the Audi dealer when I go in for the RS3. But the experience it top notch.

That is why a lot of my GM buddies for years said Caddy should have taken Corvette and they should be separated from the rest of GM lineup.

GM has been dissuading dealers from placing markups on Corvette special models (Z06, ZR1, anniversary models, pace cars) since long before I started at GM. I am only talking about markups, not down payments.

At the end of the day, a dealer can do whatever they choose to do. But as with so many things in life, actions have consequences. Measure accordingly. I’ve seen dealers “advised” that if they felt compelled to set markups on models GM didn’t want marked up they could expect reduced allocations of those products and, in some cases, other high demand products. In other words, “ feel free to mark up that one ZR1. Meanwhile we’ll continue to prioritize allocations of Suburbans”.

[FarmerFran]

Originally Posted by Martinjlm

GM has been dissuading dealers from placing markups on Corvette special models (Z06, ZR1, anniversary models, pace cars) since long before I started at GM. I am only talking about markups, not down payments.

At the end of the day, a dealer can do whatever they choose to do. But as with so many things in life, actions have consequences. Measure accordingly. I’ve seen dealers “advised” that if they felt compelled to set markups on models GM didn’t want marked up they could expect reduced allocations of those products and, in some cases, other high demand products. In other words, “ feel free to mark up that one ZR1. Meanwhile we’ll continue to prioritize allocations of Suburbans”.

I think we are saying (or thinking) the same thing

[Martinjlm]

Originally Posted by FarmerFran

But it does not say they cannot mark it up, right? it only says they cannot ask form more than XX down.

And if the dealers are the face of the company, they have a lot bigger problem than markups or large down payments.

EDIT: And I am expecting the same thing from the Audi dealer when I go in for the RS3. But the experience it top notch.

That is why a lot of my GM buddies for years said Caddy should have taken Corvette and they should be separated from the rest of GM lineup.

Now that I think of it, another thing GM has done for years… during the years where Corvette is included in the Employee Discount program, the retention period for employees who buy Corvettes was longer than the retention period for other cars. Typically retention period is 6 months. For Corvettes it was usually 12 months. This was done to keep employees from flipping them. If you violated this, you lost all discount privileges for at least a year.

[FarmerFran]

Originally Posted by Martinjlm

Now that I think of it, another thing GM has done for years… during the years where Corvette is included in the Employee Discount program, the retention period for employees who buy Corvettes was longer than the retention period for other cars. Typically retention period is 6 months. For Corvettes it was usually 12 months. This was done to keep employees from flipping them. If you violated this, you lost all discount privileges for at least a year.

Yep, I have bought a lot of cars off of the Employee Pricing since 1990s