Pontiac-GMC dealers had better be excited this year and ready to boost sales or they should get out of the business, says Mike Bowsher, co-chairman of the Pontiac-GMC Divisional Dealer Council.
In March, Pontiac dealers will get the G6 retractable hard-top convertible to complete the G6 lineup. They already have the hot-selling Solstice roadster, and Pontiac's marketing for its new SUV, the Torrent, is picking up steam.
GMC dealers this year will get a redesigned Yukon SUV, a redesigned Sierra pickup and the Acadia crossover.
Although Pontiac sales were down 7.7 percent last year, Bowsher is confident Pontiac dealers can increase sales by 25 percent in 2006.
Bowsher is president of Carl Black Buick-Pontiac-GMC in Kennesaw, Ga. He spoke in December with Staff Reporter Jamie LaReau.
How satisfied are dealers with Pontiac-GMC? Is satisfaction improving or diminishing?
No one is happy with sales in the last 90 days, but if you're not optimistic about what has already come in the last six months, and about what's coming and what will be here by this time next year, you need to give up, fold up and go home. Dealers are ecstatic about the products.
Is anyone happy over their sales performance in the last 90 days? Probably not, but we're long-term folks.
What are Pontiac's and GMC's hot products?
The Solstice is screaming. Folks are just coming in here dropping off money, and we tell them it'll be six months before they will get it, and they're OK with that. The G6 is hot. Pontiac has increased G6 sedan sales by 100 percent in the past two months compared to sales in October and November of last year. The 4-cylinder G6, as soon as it hits the ground off the truck, it's gone. Pontiac is trying to shift production right now to build a lot more of those.
The Torrent is extremely hot, but we haven't told folks we have it yet very well. Once they see it and get it in, they buy it. But the advertising is just starting to hit.
In GMC the Sierra Duramax diesel V-8 engine is extremely hot. The Denali line is hot. We've got the new Envoy.
What new Pontiacs are on the way?
We continue with Solstice. As far as I'm concerned, that's still new product. We've got the G6 convertible coming in March. It's going to be on time and will come in at about $30,000.
We have the 2007 Yukon and the 2007 Denali. They're building them now. Then you have the brand new full-sized truck line coming out in the fall of 2006. This time next year, we'll have pretty much the full line laid out.
How important are the restyled GMC Yukon and Yukon XL and the Sierra full-sized pickup?
We've been selling the old body style stuff awhile, and for the most part we've gained market share. But again with these new models and GM having so much of the volume domestically, it's gigantic.
It's critical that these are successful, from not only GM's point but from our point on the dealer side. Normally you can pick out a model that's not going to make it, but there wasn't one of them that I saw that didn't have a niche or place in our showroom.
On the full-sized truck and utilities, they're new, with better fuel economy and quality, so we have a lot to brag about there.
We have a crossover coming for GMC called the Acadia, and that's going to be hot.Why does GMC have to be a little brother to Chevrolet? Why can't we sell 1 million vehicles a year?
Are your dealers making money on new-vehicle sales?
It sure makes it a lot easier with a GMC truck line. We are looking for substantial gains in Pontiac and GMC business in 2006. In the past year or so, GMC has had to prop up the profitability of Pontiac, there's no doubt about it. We'd like to see a 50 percent increase for Pontiac, and I'm looking for GMC to go up sky high.
I would like to see us sell 1 million vehicles for GMC. I don't think that's realistic for next year. I'd like to line it up for the next 24 to 36 months to sell a million because I think the products are there and the market is there. We've got the right stuff.
Pontiac needs a 25 percent increase in unit sales next year. With all this new product and stuff, if dealers can't raise their business 25 percent - well, I don't think that's going to be a tall hill to climb.
With gasoline prices still going up and down, how confident are dealers that customers will be receptive to these new trucks?
Obviously, you have budget-conscious customers out there, and then there are people out there who have to drive an SUV.
GM has to get the message out about how fuel-efficient these new full-sized SUVs are - two miles per gallon better than our competitors and displacement on demand - we need to do a great job, not a good job, at getting that message out. If we don't get out there and tell these folks how fuel-efficient these vehicles are, we're missing the boat.
Is there anything else dealers want in the lineup or would like to see faded out?
Yes, it comes up all the time that we need a small entry-level Pontiac. I know GM understands that and is working on it, but dealers consistently ask for a small vehicle to replace our Sunfire.
I'm not sure we need both a Buick and Pontiac van. We have the Pontiac SV6 and the Buick Terraza. I would think we could do with just one.
I'd like to see a Mustang or Firebird or Camaro-type car come back.
What challenges do Pontiac-GMC dealers face in the next year?
The number one challenge we're going to face is sales personnel. If you look at the programs we've run in the last 12 months, the majority of them have not had to sell the car. They've shown the car, but the price has been decided for them. So we have a lot of people out here who have never sold a car the traditional way. So training for our salespeople is critical.
How are dealers responding to GM's Pontiac-Buick-GMC channeling effort?
They understand it completely. You may have one or two folks that have a channeling issue, but we've been told enough that this is going to be one division at some point, and if you're standing out there with a single point store, it's going to be very challenging for you.
There are a lot of efforts going on behind the scenes to try to channel those guys together.
GM has been very good to work with in terms of trying to consolidate dealers, and I think you'll see more of that. GM's involved in that, and right now all dealers need to be at their best. If dealers are out playing golf, they may come home to find a hole where their dealership used to be.
What is the top priority of the dealer council in 2006?
Coordinating our efforts in terms of launch products.
How is Buick-Pontiac-GMC General Manager John Larson doing?
John's a bulldog. He's a silent assassin. Coming from a financial background, he understands how GM works. He fights for the P-B-G channel. I have full confidence in John.
As dealer council chairman, what are your goals for the upcoming year?
One of the goals is to have coordination between the dealer body and GM, making sure that every launch we do is a hit and successful - in terms of sales training, having the product available, marketing it with the right message and making sure the timing and all of our efforts are coordinated so that it's a home run. We don't want to be out there advertising and the product isn't available.
What are the dealer council's top concerns?
In 2006 we have the most important launches in recent GM history coming up. That is a concern. I'm not saying they'll screw it up or won't screw it up, but we need to coordinate our efforts. We're not independent. The dealers realize that we're tied together, and we're all going to win together or we're not.
I think GM should consider eliminating its public relations department and outsourcing it because GM is not getting the message out. We've got a lot of great things going on, and things aren't as bad as what is printed in the paper. There's so much we could be telling folks, and that department has not been effective. I suggest they outsource.
Cleaning up the over-inventory of past year models and selling that down is important.
Finally, recruiting and keeping good salespeople who are trained. GM has done a hell of a job in their training aspects. They hired 70 additional trainers who work nationwide, and they're doing a good job now.
How is GM responding to those concerns?
GM is working very well with us right now. If we have an issue, they address it. I would tell you that 10 years ago, you couldn't get a GM employee on the phone on the weekend. Now I'm getting e-mails on Saturdays and Sundays. These folks get it. They're aggressive. Before it was dictation - our way or the highway - it's not like that now. They're looking at both sides. We realized that we're all tied together.
Do dealers want to see GM get out of the big incentive game?
Yes, we've talked about that. Total Value Promise was a marketing program designed to deliver more to the customer than they expected.
How do dealers feel about GM's move toward value pricing despite the difficulty it has had in marketing the concept under Total Value Promise?
Dealers were confused because a majority of us started calling it "total value pricing" because it came out during the employee pricing program and so we assumed all these vehicles would have a lower price. It's really a promise that GM is making to back its vehicles. We did have six models where GM did roll back prices on, and it was done more for Internet.
I go back to GM's PR folks. This was grabbed by the dealers and media right out of the chute and confused with GM's employee discount program. So it turned into "total value pricing."
Dealers understand it now: It's a marketing campaign, not a pricing campaign. They're trying to give the customer more in content, owner experience and more value for the price, I hate to say that - the pricing part. If it were value pricing, we would have rolled back the pricing on every model and stripped all the incentives.