Good to see at least one brand taking action.

The C8 Corvette Stingray is in its third model year and demand is showing no sign of dropping off. Now with the highly-anticipated 2023 Corvette Z06 right around the corner, we’ve become very concerned about how some Chevrolet dealers are looking at the new American sports car as a cash cow with plans to generate as much profit as possible above and beyond the Corvette’s Manufacturer’s Suggested Retail Pricing (MSRP) at the expense of Corvette buyers.



As more and more stories about dealer malfeasance come to light that includes everything from demanding thousands of dollars in Market Adjustments after the car arrives to intentionally screwing up orders so that customers walk away from the deal, it’s become apparent to GM that it really needs to start policing their dealers better when it comes to selling these in-demand vehicles. And it is not just the C8 Corvette that dealers are targeting for huge price increases. We also have the upcoming Silverado EV, the GMC Hummer EV, and the Cadillac LYRIC which have also garnered much interest from consumers.

We’ve already heard about Chevy’s new plan for allocations and it’s still something we’ll have to wait to see if by moving to an Average Daily Supply model will nudge dealers to stay with pricing the cars at MSRP. Not waiting around is GM’s North American President Steve Carlisle who fired this recent warning shot by telling dealers straight up that they risk having their vehicle allocation redirected to other dealers who aren’t being bad actors in the new car sales process.



Dear GM Dealership Team,

We are all very excited about recent GM news and product launches including the Chevrolet Corvette Z06, Chevrolet Silverado EV, GMC HUMMER EVs, GMC Sierra EV, and Cadillac LYRIQ. At the same time, we have both been working hard to meet customer demand in a time of constrained supply of inventory due to the global industry-wide semi-conductor shortage.

Unfortunately, it has come to our attention that in connection with some of these announcements and launches, a small number of Dealers have engaged in practices that do not support a positive sales experience for our customers. This puts our collective interests at risk and generates negative press that reflect poorly on GM’s brands and your dealerships. Specifically, it has come to our attention that some dealerships have attempted to demand 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.

First, I want to remind you that GM dealers are obligated to ethically and lawfully sell GM Products, as stated in Article 5 of the Dealer Sales and Service Agreement:

“Dealer agrees to effectively, ethically and lawfully sell and promote the purchase, lease and use of Products by consumers…”

“Dealer agrees to advertise and conduct promotional activities that are lawful and enhance the reputation of Dealer, General Motors and its Products. Dealer will not advertise or conduct promotional activities in a misleading or unethical manner, or that is harmful to the reputation of Dealer, General Motors, or its Products.”

Providing customers misinformation about additional sums being necessary for a customer to keep a reservation, is just one example of a tactic that reflects poorly on all of us.

Secondly, we have been advised that brokers are promoting new GM vehicle allocation. While the majority of GM Dealers do not support such behavior, a small number of Dealers still continue to work with brokers despite the following reminders that this is a direct breach of the GM DSSA: Bulletin #20-06 “Transactional Integrity and GM Export Policy” dated July 1, 2020, and Bulletin #21-17 “Sale for Resale or Export” dated November 22, 2021. As stated in Article 5 of the Dealer Sales and Service Agreement: “Dealer agrees that it will not sell new Motor Vehicles for resale” and “Dealer is not authorized . . . to . . . sell Motor Vehicles to persons or parties (or their agents) engaged in the business of reselling, brokering (including but not limited to buying services) or wholesaling of Motor Vehicles.”

GM will be forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity that customers expect from the Chevrolet, Buick, GMC, and Cadillac brands. For the small minority of bad actors that are engaging in the conduct identified above, this letter serves as notice that GM reserves the right to redirect your vehicle allocation or take other recourse prescribed by the Dealer Sales and Service Agreement.

If you have any questions or comments, please reach out to your Zone Manager.

Regards,

Steve Carlisle
President GM North America


For the record, this was a way better response to dealers than what we saw from Chevrolet’s Director of Car and Crossover Marketing, Tony Johnson who told us GM wasn’t too concerned about Corvette dealer markups a year ago. GM should rightly be concerned especially when the C8 Corvette is bringing in many customers who are buying from Chevrolet/GM for the first time ever. You only get one shot to make a good first impression!

https://www.corvetteblogger.com/2022...tments-on-z06/

 

That note is meaningless imo. Nothing will be done.

My local Chevy dealer has a new C8 coupe that I stopped by to see. Sticker is $87k. Sales guy said we are looking at $20k over.

Most dealers have mile long lists for Z06 - you can trust 100% that ADMs will be paid.

 

agreed, these notes are useless. dealerships will find every single way to add the markup

 

Waste of time. Those letters to dealers mean nothing. It's just publicity for the uneducated viewer. With no actual rule or law, anything and everything goes at the dealer. Have people not caught on yet to the fact that manufacturers do nothing to curb the gouging? We've seen this song and dance for several years. My opinion, the manufacturer is totally fine with the gouging. A healthy dealer profit likely means they will need less support ($) from the manufacturer. A win win for both.

 

This is what happens (or can happen) when you don't have a No-Dicker/Straight-MSRP policy like Saturn and Scion had. Now you're starting to see it for yourselves.

 

Lmao. I don't think I've heard that term before.

 

Nothing funny about it. The no-dicker / Straight-MSRP policy meant that, under the legal conditions of the franchise, regardless of supply or demand, dealerships were simply not allowed to charge more (or less) than list plus tax/tags. Doing so would revoke one's franchise.

 

All that would happen if you implemented this with the Corvette is that buyers would immediately flip them and pocket the premium themselves. You can’t change the laws of supply and demand.

 

good point. instead of begging dealers not to mark them up, maybe gm should just raise the msrp/invoice so they make more profit.

 

Didn't Ford have some type of stipulation on the GT that buyers could not sell the car to flip before a certain timeframe? I'm curious how that is enforced by Ford?!

 

They sue the owners who violate the contract. Probably the largest such story was John Cena, who settled for an unspecified amount, and donated the proceeds from the sale to charity: https://www.caranddriver.com/news/a2...esale-lawsuit/

 

Tesla does this all the time. GM should do the same. Problem solved

 

interesting to see what ford did! wondering if higher end car makes like bugatti, ferrari, mclaren, etc have the same stipulations.
from my view, the filthy rich may not really care about contracts and risk taking the monetary hit (if any) to their apathy.

 

They punish "naughty" consumers in other ways. Ferrari, for example, will knock you down on their priority list. You may miss out on being invited to buy an upcoming model or they may prevent you from buying certain models altogether.

 

Then you are hurting the loyal consumer. GM did raise C8 prices.
There are plenty of dealers that sell Corvettes at MSRP especially on ordered cars and if you are willing to wait.

The C8 inventory is much better now so the crazy ADMs will now be going to Z06.