Following Chevrolet becoming the industry's fastest-growing crossover brand in 2017, dealers are counting on the redesigned Traverse and Equinox crossovers to help continue that momentum as they await the next-generation Silverado pickup.
The 2019 Silverado — scheduled to begin production in the third quarter — continues a product onslaught of the brand's most important vehicles that began last year with the Traverse and Equinox.
The popular crossovers combined for about 20 percent of the brand's sales in 2017, while the Silverado remains the "backbone of Chevrolet" at 14 percent of sales, said Chevrolet National Dealer Council Chairman Mike Bowsher.
Bowsher owns Carl Black Automotive Group, which has four General Motors dealerships in Georgia, Tennessee and Florida. He says dealers are optimistic that redeveloped dealer programs and newer products can help build on successes, including three consecutive years of retail share growth, ahead of the arrival of the 2019 Silverado.
Bowsher, 54, spoke with Staff Reporter Michael Wayland about Chevy's next-gen Silverado, redesigned crossovers and the potential to continue increasing retail sales.
Q: How was 2017 for Chevrolet dealers?
A: It was a good year. We enjoyed our third consecutive year of [retail] market share gains. Both the new Traverse and Equinox came out and have been received very well. We need to build on that momentum into '18, carry it forward and see if we can't do a fourth year of sales gains.
Will it be more difficult to continue that streak with U.S. sales expected to decline for a second consecutive year?
The dealers are pretty optimistic on the market right now — the economy, stock market, consumer confidence and the tax cuts are all positive. The Traverse and Equinox are carrying huge momentum. Silverado has not slowed down, either. We continue to build on that. Later in the year, the new truck is coming, which is going to be really exciting. We'll be selling both the new and old body styles at the same time, and that always allows us to help increase sales.
I think as far as the Chevrolet dealers are concerned, we're very bullish on 2018.
How important is the 2019 Silverado for Chevy dealers?
It's massive. Those of us who have seen it and driven it are extremely impressed. This truck for Chevrolet is a game changer. We're very excited about it. All Chevy dealers would like to have the new pickup sooner, but it will come in time and they need to get it right.
Silverado is the backbone of Chevrolet, no question. It has always been the backbone. To have this truck coming out with the capabilities, the technology and things this truck has, is very exciting. It should top off a pretty darn good 2018 for us, and we're counting on it.
How was driving the pickup?
It was outstanding. I love the size of the truck. I love the way it handles — it's smooth but capable — and just the overall way it drives.
I was very fortunate to get to drive it at GM's Milford Proving Ground. Doing that really gives you a sense of pride and enthusiasm. GM, in the last several years, has been very good at allowing us to go out there when the opportunity arises.
What challenges do Chevy dealers face?
Rising interest rates is something we all have to take into account when we are managing inventories and things like that. We enjoyed, pretty much, flat or zero interest rates for a pretty long time. So, if these rate hikes filter into the business over the next 12 months, it's something that we have to manage.
Will crossovers continue to take away from car sales in 2018?
No question, the car market itself, across all OEMs, is challenging, to say the least. I think GM and Chevrolet — in particular — have done a pretty good job of managing the car inventory.
The dealers are actually asking for more of certain models — Cruze and Malibu, right now — especially going into tax season and refund season.
The car market has been challenging. But with the crossovers that we've got, these are pretty industry-leading crossovers, and we're pretty pumped on that. That can make up any ground we may lose in the car market, which is a pressing issue for all OEMs right now.
GM's inventory levels were pretty high for much of last year. Will inventory be a problem in 2018?
It's just a balance of inventory. Chevrolet dealers want more and more of the hot stuff — Cruze, light-duty diesels, Equinox — we're fighting for more. Then there are vehicles, mainly in the car market, that the overall inventory is either shrinking or slowing down.
I don't think we're going to have that issue. GM has done a pretty good job over the last several years of managing that. Were they a little too high last year? Maybe.
But we did correct it and they came out to help us do that. I feel like in '18, we'll be able to manage that pretty well.
The tricky part of '18 is going to be managing the current full-size truck model versus the incoming, new body style. That's always something you've got to manage, but GM has always been there for us and helped us move it. That's just something we've got to keep our eye on.
What about GM's strategy of continuing to sell the current model alongside the next generation?
I've been through several truck body style changes over my 30 years with General Motors, and there are a lot of die-hard, "I like the old one better than the new one" owners who just have to have that current body style over the new one. I'm confident we'll be able to meet both demands. GM, I'm confident, will be there with incentives and things to get those moved.
Would dealers like any additional vehicles in Chevrolet's lineup?
The compact crossover market is the fastest growing market out there. Any additional product — whether it be TrailBlazer (or Blazer), if that comes to fruition, or anything else they may be working on in the compact crossover market — we'll take it. That is absolutely on fire. It is booming.
In the overall industry, it is probably replacing the cars. Chevy needs to make sure that we answer that with whatever model is available that they can put in the market. Chevy dealers will be there to put them on the street.
GM has announced an aggressive EV strategy. Is it difficult for dealers to sell EVs? Are customers confused by them?
This is a big-time learning curve for all car dealers. This industry is changing and the market is moving forward. We've got to keep up with it, and training so we can explain it confidently is something we have to continue to work on.
We have to educate the consumer and educate ourselves. Education is a big thing, especially for the dealer personnel and the dealer service department. And having relevant things such as charging stations [on-site] are very important.
Are Bolt EV sales taking away from Volt sales, which were down 17 percent in 2017?
Chevy was the largest brand of EVs in the market. I would tell you that yes, there are certain markets that are way more advanced and customers are more demanding, but I think with the cadence and the way they rolled out [the Bolt] was pretty smart.
It's up to the dealers in [less popular EV markets] to try and get up to speed with learning the new technologies and stocking these units to meet customer demand.
The Bolt is a pretty unique vehicle. I can't tell you for sure that it dipped into the Volt sales. But I would tell you that they're both great vehicles.
I do see this market continuing to grow. You see all manufacturers kind of racing to have an answer for that and GM will be there. It's just going to keep coming out more and more over time.
Can GM do more to help dealer profitability?
Yes, that is part of our constant communication with GM. That's our job as a council, to constantly focus in on how any programs they put out might or might not affect dealer profitability.
We have a lot of programs in 2018 coming out and being implemented. The phase-in of these programs is critical. It's all good stuff.
Is part of that the redesigned Standards for Excellence dealer-incentive program? How will it help dealer profitability?
I don't want to go into extreme details, but with the payouts this year and the components of the program, you can make a lot more money. The dealer who executes in 2018 can make considerably more money on Standards for Excellence than in years past. SFE is a huge opportunity for Chevrolet dealers in 2018 and we need to take advantage of it.
Did you accomplish your goals as incoming dealer council chairman in 2017? What are your goals as you head into your final year leading the council?
I think we did a pretty darn good job last year. Chevrolet, again, gained its third year of market share increases. One of the highlights would be to go out with a fourth year.
I would say what we try to accomplish as a dealer council, as a team, is constantly increasing franchise value and dealer profitability. That is why we're all in business. The franchise value and dealer profitability are the most important parts.
Also, moving the network forward into the 21st century of selling cars and getting everyone trained up and embracing the change in market is one of our main goals. Communication is extremely important.
Anything else you'd like to add?
I'm honored and all the council members are honored to represent the Chevrolet dealers. It's a job we take very seriously. We absolutely work our tails off.
I would tell you that [Chevrolet U.S. Vice President] Brain Sweeney and Scott Bell [director, Chevrolet sales, service and marketing] and the leadership team are just remarkable. They're partners. I have to tell you, we have the best relationship with Chevrolet's leadership that I've ever seen in my 16-year history on councils. These folks really work with us to make sure that what we put into the market, we can implement and succeed. It's just been really good deals.
Do we always get everything we want? No. But do they listen to us and do they try and find a way to meet in the middle? Every single time.