With the launch of the Malibu sedan and the Traverse crossover and Camaro on the way, Chevrolet is poised for a sales increase this year.

Chevrolet dealers need the new products. Many still are battling low new-car sales, high floorplan charges and small profit.

Chevrolet also is trying to bolster its environmental image. In January 2007, General Motors introduced E-Flex plug-in series hybrid technology in the Chevrolet Volt concept.

Greg Heinrich, co-chairman of the Chevrolet dealer council, spoke with Staff Reporter Jamie LaReau about what he'd like to see addressed and where he sees Chevrolet headed.

As dealer council co-chairman, what are your goals for this year?

I have three. One would be the LMG (local marketing group) advertising process. That is a highly debated advertising concept GM has, and I think we'll see some improvements. We need to, because we need to keep dealers in the LMG process.

The second is dealer profitability. For certain parts of the country it is even more challenging than a year ago. I don't want just a small profit. I want dealers to get a return on their investment. Some parts of the country are struggling with that, and others are doing great. We need a strong dealer body.

The third is the Standards for Excellence process. We just came out with the new program. My concern is that it needs to be a fair program that works for all dealerships and all sizes. I want it to make sense for the risk that dealers take and what reward they get.

Is it a customer satisfaction index program, or is it a sales incentives program? They're trying to do both with it. And that's kind of hard to do, especially while some of us are trying to be profitable in our new-vehicle department, and we rely heavily on the SFE to bolster that. Having it based on the previous year, when it was really good, makes it harder to meet objectives.

What changes do you want?

I would like to see Standards for Excellence results based on the market that we're in and not on the previous-year results. I also want to make sure the program is fair for dealers of all sizes.

What would it do for Chevrolet if the Volt is built?

It would do a tremendous amount. It would put us to the front of this whole concept GM has of the gas-friendly to gas-free. I think we've passed Toyota on our technology. The Volt would cement GM's plans on where it's going with technology.

One area of controversy has been Chevy car advertising. Mark LaNeve, GM's vice president of vehicle sales, service and marketing, has admitted that was a weakness. How do dealers feel about the new Malibu ads?

We've only seen a few of the Malibu ads — and so far, so good. I think Mark is right; we can do a better job on the car side, and him putting an emphasis on that has set the tone, and we'll get better advertising. So far, Chevrolet has done a great job in introducing the new Malibu. It is very important to our success. We're only in the first of three phases of the advertising, so I think we're on the right track.

Truck sales are down as gasoline prices remain high and a desire for greener cars sweeps the nation. What are Chevrolet's chances of being a strong car brand?

I think pretty good. The Cobalt and the Impala have done very well, and it'll be better with the Malibu coming. The HHR wagon has been one of our best-kept secrets. It's priced very well, but there haven't been high incentives on it.

How many customers ask about hybrids?

Quite a few. I think having the first (full-sized) sport-utility hybrid will give us a chance to go to the front of the pack. In reality, there aren't that many sold, but it is important that we offer it. For some people, it is a priority, so it's good that we have two options: the Malibu and the Tahoe. There is a lot of buzz about it, and buzz is always good.

In the past, we have lost consideration for not having a hybrid.

What is Chevrolet's goal for 2008?

I would say to increase market share. I think it's important we stay ahead of Ford and Toyota. We have a pretty good lead, but being number one is a position that a lot of people covet.

Chevrolet is going to market to Toyota Camry and Honda Accord owners who have Silverado trucks. They call them "garage mates." They number about a million. Chevrolet is going to go after those customers. Hopefully, they are happy with their Chevrolet trucks, and now maybe they'll consider buying a domestic car.

I think that's a great opportunity for us. I am not sure when they'll start this advertising, but it's in the works. The question is, would someone in California be seen driving a Malibu? No way. Well, now, with this new car, I think they would.

Are Chevrolet dealers profitable?

In certain areas of the country, it is harder than others. California and Florida right now for domestics are not good. That's alarming because both are very populated states and huge car markets and opportunities. If it's not going well, that doesn't bode well all the way across.

Are dealers satisfied with Chevrolet, and is that feeling improving or diminishing?

I think it's improving. I would like to see Chevrolet higher than it was in the NADA dealer satisfaction survey. We were in the bottom third. Quite frankly, there were brands there that I can't understand why they were ahead of us. But I think Chevrolet is making great progress. The deal with the UAW was a big step, and with that aside now GM knows where they are on cost structures. GM can get more in the game. In light of everything that has happened over the past couple of years, we're optimistic.

Earlier this year, dealers were concerned about the high cost of floorplans. Has that eased at all?

The grounded stock — the inventory — has eased off a little bit. GM has about 80,000 fewer units this year than it did this time last year. Depending on where you are in the country, you'll get different views. My inventory is a bit higher than we'd like, but we have brought it down. It kind of goes along with dealer profitability and return on investment.

There are three parts to our business: How much product we have, how many people we have and how we pay them, and how much promotion we do. Those are things we as dealers can control.

I would say floorplan cost is one of the top two or three concerns for dealers. But based on what I am told, we'll produce fewer cars and trucks. And if GM holds to that, inventory will come more into line.

GM plans to continue its value-pricing strategy of lower incentives and reducing daily rental fleet sales. How did dealers feel GM handled incentives and pricing in 2007?

It depends on whom you talk to. You get different opinions. I think it's more favorable than not and that we're going the right way on incentives.

We are looking for certain model lines that aren't moving that we get assistance on, and we've seen GM do that. We're moving the right way, and we'd all like to have more, but it's driven by budgets.

Are dealers making money on new-car sales?

Yes, I would say that they are. But in 2007 more so than most years, I think dealers found their service, parts and body shop are more important than ever. We are relying on that to carry a greater share. At our store, that's very important. That's why this Malibu needs to sell well, so we can get that volume and then get those people in the family so that we can service them, too.

What is Chevrolet dealers' days supply, and what should it be?

I would like to see it in the 90-day range. I don't know what it is now, but I'd suspect we're pretty close to it. Ideally, it would be really nice to be at 75 or 80 days.

What are you doing to reduce your floorplan costs?

We're taking a hard look at what we order and taking a look at past sales and what we anticipate sales to be. In some cases where we might have been more aggressive in the past, like pickup trucks, we're being a little more conservative.

What does the factory need to do to help dealers sell more vehicles?

I think it's having a more consistent playbook in terms of what they're going to advertise and the promotional advertising events. Basically, you can look at some charts, and it is laid out for the year. We'd like more information, but I don't know if that's realistic. I am not critical of what Ed Peper and Chevrolet are doing, but as a business, you'd like to have more than 30 days to plan.

Does Chevrolet have the right number of dealers?

I don't know what the right number is. We have 4,000 dealers; Toyota has 1,200. Are they closer to the ideal number than we are? I don't know. c