General Motors has brought back local dealer advertising groups. The company wants 50 of the groups immediately, which will help place advertising in metropolitan markets.
However, many dealers are not impressed. GM will keep control of the purse strings. GM will never get the groups back to where they were unless it gives dealers more control.
Too many dealers were angered two years ago when the company channeled $600 million in local funds to its five regions, where spending was controlled by GM staffers.
GM now is saying dealers will have input on such things as local events and creative advertising. But that's not enough.
That said, many major-market dealers welcome the return of local groups and some extra GM money to buy expensive media. They will pay up to 1 percent of a vehicle's invoice price, and GM will contribute 25 percent on top of that total.
The new system is voluntary. GM forms a group only if it recruits at least 75 percent of the volume dealers in an area. That means the other 25 percent - usually rural dealers - get a free ride.
But rural dealers don't see it as a free ride because they don't think they're getting any of the benefits. Why, they ask, should they be expected to pay for media that might not even reach their customers?
Most Pontiac and GMC dealers in the Detroit area want 100 percent participation or none, said Ed Levy, president of the tri-county GMC dealers.
'A couple of dealers are reluctant to get back in,' Levy said. 'Much of our business in Detroit is GM employee business, so any additional assessments can't be passed along to those buyers. What if we go with 0.25 percent or 0.50 percent and only on nonemployee purchases? Would there be enough to make it worthwhile? We'll go to those reluctant dealers and show the proposal and maybe we can change their minds.'
GM wants to form 50 groups immediately. It will never regain the 954 it once had unless it gives dealers more control.
You can reach Staff Reporter Julie Cantwell at [email protected] or at 313-446-0374