GM Outlines Strategy for Pumping Up Vehicle Brand Images : Autos: Plan seeks to trim number of dealers and reduce competition among company's divisions.

From Associated Press

General Motors Corp. wants its dealers to stop selling competitors' vehicles, the company said Monday in an outline of a strategy to hone brand images and reduce the number of GM dealers.

In a news release and a letter to dealers, the company's top North American marketing executive said GM cars and trucks "are not commodities and should not be offered to the public from facilities that also offer competing brands."

GM also wants to eliminate Cadillac and GMC truck dealerships from rural markets and specify preferred combinations in "dualed" dealerships--those which handle more than one GM product line.

The aim is to strengthen the images of GM's brands, reduce the overall number of dealers and eliminate situations in which GM brands that compete against one another are sold in the same dealership.

GM Vice President Ronald L. Zarrella said the preferred situation in most cases is to have dealers handle a single GM division's brands if the local market is strong enough to support that configuration. In the ideal, Chevrolet dealers would sell only Chevrolets, Cadillac dealers only Cadillacs, and so on.

The exception would be for Pontiac and GMC truck brands. For them, the "preferred network pattern" would be for the two brands to be sold in combined dealerships, GM said.

In markets that aren't strong enough to support single-line dealers of GM's other divisional products, the company wants dealerships in these combinations:

* Buick-Pontiac-GMC truck.

* Oldsmobile with Cadillac, or with Chevrolet if Cadillac is not represented in the market.

* In rural areas, the preferred combination would be Chevrolet-Buick-Pontiac-Oldsmobile, with no representation by Cadillac or GMC truck.

* Saturn dealerships would continue to offer only Saturn division vehicles.

"Each brand needs to be properly presented to the public through a renewed emphasis on having the right number of dealers, at the right locations and of the right size," Zarrella said.

For that to happen, some dealerships would have to close, remodel, relocate, combine or separate. GM spokesman Tom Klipstine said a team will begin working next year on ways to make that happen. Presumably, GM would have to pay dealers to bring about some of the changes it wants.

There are about 17,000 GM franchises spread among 8,500 U.S. dealers. Some dealers have as many as six GM franchises operating from a single location. Klipstine said he could not provide statistics on how many GM dealers also sell competitors' vehicles.

The company's goal is to trim the number of dealers to 7,000 from 7,500 in the next five years.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World