Chevrolet and GMC are implementing stricter standards for conversion companies.
Most of the new policies will go into effect this year as part of the divisions' efforts to enhance customer satisfaction at the dealership level.
The new standards range from requiring converters to upgrade their warranty procedures, to submitting detailed business plans, to undergoing quality audits by Chevrolet and GMC personnel.
Chevrolet plans to give details of the new standards to conversion companies this month. Converters will have six months to meet the minimum requirements.
'We will rigorously enforce these new standards,' says Frank Raine, assistant general sales and service manager for commercial vehicles at Chevrolet. 'If the companies don't meet the new standards, they can do business with someone else, but it won't be Chevrolet.'
Some standards already exist.
Paul Campbell, director of marketing and advertising for Glaval Corp. of Elkhart, Ind., says his company - one of the largest converters - and some others already meet the Chevrolet standards. He says the loose end has been enforcement by the company.
'They just can't police all of the people who have access to the chassis,' Campbell says.
Campbell also says some of the smaller companies will not be able to afford to meet the warranty requirements.
'Meeting the warranty expenses probably will mean the difference between mak- ing it in this business and not making it,' Campbell says. 'But we welcome the changes because it will be good for the entire industry.'
Raine says the new standards were developed jointly with Pontiac-GMC and 10 upfitter companies.
Chevrolet and its dealers work with about 85 recreational conversion companies and 55 commercial conversion firms that basically design packages for vans, he says. The new standards will first affect the personal-use side of the business.
These companies buy van and truck shells from Chevrolet, convert the interiors and then sell them to dealers who sell them to the public.
Conversion companies only make money on their conversion packages. They cannot charge a markup on the chassis.
Campbell says the average price of a conversion package to dealers is about $6,000. The margins are slim, he says, but the business is profitable.
The new standards will also require converters to have the same warranty on their packages as the factories offer on the vans.
'Our dealers will love this, and our customers will love it,' he says.
Frank Akins, general manager of the Lawrence Marshall dealership (Chevrolet-Oldsmobile-Cadillac-Chrysler-Plymouth-Dodge-Jeep-Eagle-Ford-Mercury-Isuzu) in Hemp- stead, Texas, agrees.
Marshall, one of the largest Chevrolet dealerships in the country, sells 800 to 900 converted vans annually.
Akins says his store does not have problems with the conversion companies, but there are no set rules governing the industry.
As an example, the factory warranty on a truck may be longer than the warranty on the conversion package.
'It will make things so much easier if everybody is under the same warranty standards,' says Akins. 'This will ease the way we handle business with those companies.'
Chevrolet and GMC dealers sold about 100,000 converted recreational vehicles and about 30,000 converted commercial vehicles annually.
Says Raine: 'I doubt the business will expand, but this is a solid, significant piece of business and we need to be a part of it.'