Chevrolet finished 2005 with a bang by meeting a longtime goal: to beat Ford Division in sales, says Roger Moody, co-chairman of the Chevrolet Divisional Dealer Council.
Chevrolet beat Ford by 17,083 units, but Chevrolet sales fell by 3.5 percent to 2,651,124 units in 2005 compared with 2004.
Moody says Chevrolet is headed in the right direction to beat Ford again this year, but dealers have to work better as a team.
He also says Chevrolet needs a great muscle car to compete with the Ford Mustang and Dodge Charger if Chevrolet is to gain back market share.
Moody spoke with Staff Reporter Jamie LaReau in January.
The dealer council's top priority last year was for Chevrolet to hit 3 million in sales, but the division fell short.
Our main goal was to beat Ford, which we accomplished.
Does that remain the goal for 2006?
Obviously, we want to do that again. But I think we'd like to get back market share.
How important was it to take the top spot over Ford?
It's pretty important. The last time we did it was 19 years ago, so it's been a while. It's a great accomplishment. I take my hat off to the 4,100-plus Chevrolet dealers and the factory in achieving that goal.
What is the top priority of the dealer council in 2006?
The top priority would be to have Chevrolet be the best franchise out there in the market.
How would that be measured? By return on investment.
Communication is also essential, and when you're talking about communication, I mean with everyone - from fellow dealers to the manufacturer. The other thing is that they value dealer input that we give to GM in terms of building cars and trucks that the consumer's got to have.
What is Chevrolet's hot product? And what's not working?
The hot product obviously is our HHR. It starts off at a base price of $15,990. And we have the Impala, which is a great vehicle and starts off at $21,990. If you also look at the Aveo we've got coming and the Malibu - we have some great products coming. We have eight vehicles that get over 30 mpg. Fuel economy is on everybody's radar screen today. Our Tahoe, which we just launched, is rated at 16/22 mpg.
What's not working? I would have to say our SSR is not meeting our expectations in sales volume.
What new products are on the way?
We've got the Aveo, and it's out this year. Obviously, the Tahoe for this year. We've got the Monte Carlo, the Suburban, the Avalanche and the Silverado. The launches are scattered throughout 2006. We just introduced the HHR and the Impala.
You'll be losing the SSR soon.
There's a market for it. I just personally think it's priced a little too high. If it had a better price point, it would meet everyone's expectations.
Is there anything else dealers want in the lineup or would like to see faded out?
What dealers would like to see in the lineup is more hybrids. The competition is advertising hybrids. When you look in the car lineup, Chevrolet does not have a wide range to choose from.
How many of your customers ask about hybrid vehicles?
I would say probably two or three out of every 10 to 12 customers ask about it. Once we go through and show them what our vehicles do in terms of fuel economy, we can win them over in most cases. The frustrating part is the consumer will react real fast, and we don't have a chance to talk about our products that get over 30 mpg, and the room and the safety. The problem is we're not getting a chance to talk to those people adequately enough.
With gasoline prices still fluctuating, how confident are dealers that customers will be receptive to new Chevrolet Tahoe, Suburban and Silverado?
I think Chevrolet dealers as a whole are pretty positive when you talk about the Chevrolet line in general and you talk about eight vehicles that get over 30 mpg and displacement-on-demand and the V-8 engines, E-85 ethanol, hybrids and so on. When you talk about fuel savings and technology, we've got a pretty good arsenal. We have an excellent arsenal, and the dealers know it, but we have to get the message out to the consumer better.
How's Chevrolet General Manager Ed Peper doing?
Ed Peper is doing great. Obviously, he's excited about beating Ford for the first time in 19 years. He's very positive and energetic. He works endless hours, and he understands what the dealers want, and he's very easy to communicate with.
As dealer council co-chairman, what are some of your goals for 2006?
If I was just to name a couple of them, great communication is one. By that, I mean that programs are very easily understood in terms of rebates to the consumers.
Obviously, beating Ford.
I'd like to see us strengthen the local marketing group process. We should make it more attractive for dealers to join. Our goal should be 100 percent participation. There are more benefits for being in the LMG than there are negatives. There aren't really any problems with it, it's just getting all of the dealers in the process. Our goal - if we're going to gain market share, is teamwork, and we all should be on the same page.
What we also need are products to fight the competition. Whether it's the Ford Mustang or the Dodge Charger, Chevrolet needs a product to go head-to-head with these products. Right now we don't have that.
With all the products we have today, we just have to do a better job marketing the products, and not just rely on Chevrolet or General Motors to do this.
What are the dealer council's top concerns?
Return on investment, improve market share, have vehicles to compete in the marketplace, Standards for Excellence - the concern there is that the objectives can be met and that Standards for Excellence has helped our CSI in a lot of cases. And I think Standards for Excellence has to be something that has to be addressed by GM by getting more people on the program.
When we talk about customer satisfaction, I think we also need to address dealer satisfaction with the manufacturer. Dealer satisfaction is good, but we should keep striving to get it better and better to be the best. We've got 4,100 dealers. It's the largest division in GM.
How is GM responding to those concerns?
GM is listening to the dealers. Dealers would like a faster reaction time, and sometimes dealers are not patient people. GM is listening and is reacting, and it just goes back to communication and keeping the lines of communication open between both of us. GM is doing a great job.
How satisfied are dealers with Chevrolet? Is that satisfaction improving or diminishing?
I would say that dealers overall are satisfied with Chevrolet. They want more, and they want to be better. But when they look at the portfolio of products and the direction we're going - beating Ford - are Chevrolet dealers happy? They're not as happy as they have been, just because there's not as many people coming through the front door, but that's getting better and better. We just have to stay focused on this. Are dealers ever happy? I don't know. If they've got the tools to work with, they'll be happy, and it's getting better and better.
What is Chevrolet's pricing strategy? Do dealers like it?
It's the value promise. When you start pricing the HHR at $15,990 or the Impala at $21,990, that's a positive. The majority of dealers don't like the majority of the transaction prices set by the manufacturer. For example, when they say 'you pay the same as the employee.' It sold a lot of vehicles, and it accomplished what it was supposed to do - eliminate inventory and give a great deal - but the dealer body on a consistent basis, they don't like to be told what to price their vehicles.
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? Would you rather have the customer incentive sales?
Since 9-11, the consumer is used to huge, huge rebates and low interest rates, which brought in a lot of customers. Now what we have to do is reduce that, and where the pain comes in is that we talk about the value, and if you ask most people out there, they don't know we have great safety issues and great value. We didn't talk about the product enough, and we've got great products. We have to change our message. When you change a message that's been established for a long period of time, it's difficult. The value promise is just starting, and now everyone follows. Ford and Chrysler are waiting to see what we do.
It's a message that just has to be marketed and talked about more in detail, and it'll be fine, but dealers are used to having quick results, and when the consumer is used to having a $5,000 rebate, and now you can only give them a $3,000 rebate, they get upset.
Are your dealers making money on new-car sales?
Dealers are making money on new cars, yes. Are they making as much as they'd like to? Probably not. It's just a tougher marketplace.
Do Chevrolet dealers have the right product mix and overall marketing strategy to be successful?
I believe with the products we have on hand and the products we have coming, yes, very much so. We've got a Corvette, the Z06, where there's nothing that can come close to it when you're talking about 505 hp and 0-to-60 in 3 seconds, and it's $20,000 less than a Dodge Viper. We've got the best in class.
When you talk about a truck lineup, we have a great, great lineup. SUV market, we have a great lineup. Small cars, we have a great line. We have a great story to tell.
Can you get the vehicles you want? Or do you have to take many that you don't want?
You don't have to take vehicles that you do not want. Obviously, when things are hot and fuel economy is an issue, can you get all the Aveos and Cobalts you want? No. But it depends on the market, the program and the consumer.
The majority of the lines, you can get what you want.
Have you seen a drop in customers wanting fuel-thirsty vehicles?
When gasoline got up to that $3 per gallon, our truck market and SUV market slowed down and people were going to smaller SUV. But they have to look at the whole picture. The consumer still doesn't want to give up their comfort.
I get a kick out of the fuel-economy issue. People will go stand in line and pay $4 for a cup of latte coffee, but when gas goes up to $3, they want fuel economy.