GM revamps system for ordering cars
| Sponsored by |
| » | ||
| » | ||
| » | ||
| » | ||
| » |
Reprints
Print
Respond
DETROIT -- General Motors has overhauled its vehicle-ordering system to be more nimble in allocating cars and trucks to dealerships.
Last month, GM increased the frequency of its vehicle "consensus," which essentially is a negotiation between the automaker and a dealer over how many and which types of vehicles are shipped. GM now is performing that exercise twice a month instead of once.
Many dealers say that the change could smooth a lumpy allocation system that floods dealerships with too many cars at times and leaves them starved for certain models at others.
"It has the potential to give us more flexibility," says James Fibraio, general sales manager at T&T Coast Buick-GMC in Sea Girt, N.J. "If we get busier, we should be able to get more cars sooner."
Under the "turn-and-earn" system used by most automakers, GM determines how many cars to ship based on a snapshot of a dealership's inventory at a certain point each month and the store's recent selling rate. Dealers can counter with their own number before GM determines a final allocation.
Over the years, many dealers have complained that performing that exercise every 30 days isn't frequent enough. If a dealership sells a bunch of Chevy Cruzes early in the month, for example, it won't get credit for the sales until several weeks later.
That delays replenishment of inventory, leaving dealerships with limited or no availability on some popular models for weeks.
GM's leaner production schedule prompted the change, a spokesman says. Because GM is producing fewer vehicles than in the past, it's more important that it gets the cars and trucks to the dealerships that will sell them fastest, he says.
"It will help us improve product placement by capturing the sales and availability information more frequently," he says.
At the start of February, Jim Stutzman, owner of a Chevrolet-Cadillac dealership in Winchester, Va., had just one Chevy Equinox. By the middle of the month, 14 had arrived on his lot.
"Now, as we sell those down, we'll get credit for those sales two weeks earlier than we would have before," Stutzman says. "I think it's going to help level out those peaks and valleys."
You can reach Mike Colias at mcolias@crain.com.
