DETROIT -- General Motors wanted to save money by cutting its allowance for auto dealers to give a full tank of gasoline to new-car buyers.
But after hearing from angry dealers, GM last week reinstated its policy of fully reimbursing dealers for the cost of a tank of gasoline.
"Once we got it out, our dealers felt very strongly that our customers would expect a full fuel fill and that it was a bad decision," says Mark LaNeve, GM's vice president of vehicle sales, service and marketing in an interview with Automotive News.
"The strength of their belief was so strong that I said we made a bad decision, and I reversed it."
A GM bulletin to dealers on Aug. 18 said: "GM will reimburse dealers a flat rate for fuel expenses for each retail delivery." For passenger cars, dealers would get $20 per vehicle. For trucks, dealers would receive $30 per vehicle. The policy was to take effect on Sept. 1.
But dealers felt the policy left them with a choice between disappointing customers - and hurting dealers' customer-satisfaction scores - or absorbing costs.
Those costs would add up quickly. The 2007 GMC Yukon has a 26-gallon tank, so at $3 a gallon a fill-up costs $78, leaving the dealer to absorb $48. Filling the 17-gallon tank on a 2007 Chevrolet Impala sedan would cost $51, sticking the dealer with a $31 tab.
"A dealer would have to absorb, if he chooses to follow that policy, the cost on a full tank of gas," says John Rogin, owner of Rogin Buick in Livonia, Mich. He adds that customers expect a full tank of gasoline. Rogin says not getting one is like "not getting a napkin at a restaurant."
LaNeve says a flat rate for fuel fill-ups would have resulted in "substantial" savings for GM.
But LaNeve reversed the policy during a national dealer council meeting on Aug. 24.
"Typically, on these kinds of decisions we get dealer input first, but we didn't feel that it would be a popular decision," LaNeve explains. "But we thought the consumer expectation over time could be shifted.
"Sometimes you make a bad decision, and we listened to our dealers."
You may e-mail Jamie LaReau at [email protected]