Topic: Pontiac: Funeral Monday?

[Careener]

So who's going to be shopping for a new Pontiac bargain before they close?

If I see a new G8 GT for $25k I'll be first in line.

[articsteve]

I've yet to read anything that clearly explains how reducing the number of dealerships is a significant help for GM (or any manufacturer). I understand reduced sales will lead to fewer dealerships but I keep reading about it in terms of cost savings for GM. Where are these savings coming from?

I've wondered that myself Cord. Car dealers are an independant self-financed business. They buy their inventory from a manufacturer and are in some respects the car companies "customer" more so than "Joe Car Buyer". I would have thought "the more the better" when it comes to dealerships as far as a manufacturer was concerned.

For the past 5 years GM has declined to renew the franchise agreements of about 6 small GM dealers within 50 km of Owen Sound.  One of which was a hugely popular GM heavy truck dealer.  It was baffling to me.  PPL in small towns do not care in the least about the appearance of the dealer or whether or not the service reception is drive in.  These were some of the reasons given for the terminations.

IMO, most of the larger urban dealers, who will be leveraged to the hilt, will tank if their respective parent auto companies file bankruptcy.

For dealers, loans get personal
Lenders' terms putting retailers' assets on the line
Cautious lenders have raised the stakes for dealers if General Motors or Chrysler LLC files for bankruptcy: At risk are the personal assets of many dealers. Lenders that provide inventory credit lines have required more than half of U.S. dealers to guarantee the loans personally, according to the National Automobile Dealers Association.

[robsaw]

I've yet to read anything that clearly explains how reducing the number of dealerships is a significant help for GM (or any manufacturer). I understand reduced sales will lead to fewer dealerships but I keep reading about it in terms of cost savings for GM. Where are these savings coming from?

I've wondered that myself Cord. Car dealers are an independant self-financed business. They buy their inventory from a manufacturer and are in some respects the car companies "customer" more so than "Joe Car Buyer". I would have thought "the more the better" when it comes to dealerships as far as a manufacturer was concerned.

The relationship isn't totally independent - dealerships have a lot of attributes of franchise operations and share costs with GM in many areas.

Supporting fewer dealers with higher volumes per dealership has to be less costly.  From financing (much through GMAC), shared advertizing costs, maintaining parts inventories, service technician training programs and service equipment, dealer support staff, etc, etc - it all costs money.

[Cord]

So if in the near term, GM dealers (in the U.S. at least) are reduced by 40-50% can you imagine the stress on those remaining dealership service departments? I haven't heard anyone mention anything about GM service departments going hungry like the sales departments. Funneling all those service customers into almost half the dealers won't make for happy service experiences.

[vdk]

So who's going to be shopping for a new Pontiac bargain before they close?

If I see a new G8 GT for $25k I'll be first in line.

x2

[Mitlov]

Here's to hoping. 



Besides that, the Pontiac as a modern brand won't be missed.  As for their old cars, that's a different matter.  Lot of GTO fans out there.

[madjak30]

I think alot of people are missing one aspect of this "GM issue"....  :-\they have too much product that competes with the companys own divisions .

I think the way it will pan out for the dealers is:

GMC - Trucks and SUVs
Chevrolet - Affordable and sporty cars / CUVs...I would expect them to kill Chevrolet Truck division!
Buick - Entry level luxury...the "NEW" Saturn Astra (possibly the Sky?)will be rebadged to Buick so that a higher profit can be made ...no one seemed willing to pay premium pricing for a Saturn, and that is where they were trying to take Saturn when they closed down Oldsmobile.
Cadillac - Full luxury...should drop the SUVs, but will probably market a CUV Escalade?

All of the dealers should be able to market all four brands, since there should be no directly competing products.  I know we have three dealers here in Red Deer....Saturn/Saab, Pontiac/Buick/GMC, and Chevrolet/Cadillac.  I would expect the Saturn dealer to change brands or close, and the other two to either both market all four brands (they are at opposite ends of town), or one of them to change/close out as well....tougher times are coming for the dealers.

[Squishy]

I feel the same way.  Back when each GM division had their own engines, designs, and R&D, all those divisions competed against each other in a way that was beneficial to GM.  If someone didn't like the Pontiac, they might like the Oldsmobile.  Out of 8 cars on someone's shopping list, GM might occupy 3 or 4 spots.

The market can't support that structure anymore, so GM goes to parts and platform sharing, switching to 'corporate' engines, etc., so that now if someone doesn't like the Pontiac, there is no reason to look at the Chevy because it is the same car.  Ford pulled badges themselves off of the Escape to save production costs, so all this badge-engineering with different sheet metal and different interiors can't be insignificant in cost.

[sailor723]

So if in the near term, GM dealers (in the U.S. at least) are reduced by 40-50% can you imagine the stress on those remaining dealership service departments? I haven't heard anyone mention anything about GM service departments going hungry like the sales departments. Funneling all those service customers into almost half the dealers won't make for happy service experiences.

 

We've got 2 GM stores in our small city (around 120,000 metro) As it is it's often 4 or 5 days to get the SRX in for routine service it will be a real zoo if we go down to one.

[barrie1]

At one time they had significant differences between the engine designs in all of the GM product lines. They all built a 350 for example but each one was completley different from the others and very few parts were interchangable as well. Standadizing the pats was a good idea as the majority of their engines and transmissions have been very well built for many years now. Their computors have also been quite good since around 1982 as well after the 4-6-8 disaster in the Caddy division. They have also had some problem as well but what manufacturer hasen't ever had some really bad models as well. 

[ovr50]

I am told the most ardent Pontiac fans stopped following the brand after the early 80s when Pontiac started using Chev engines. Poncho fanatics loved the Pontiac engines, the Chev engines not so much.

Just what I'm told. 

[Erik]

I am told the most ardent Pontiac fans stopped following the brand after the early 80s when Pontiac started using Chev engines. Poncho fanatics loved the Pontiac engines, the Chev engines not so much.

Just what I'm told. 

Back then, I was one of those guys.
I was crushed when I found out the the Pontiac Turbo 301 was not going into the 82 Trans Am. Instead of 200+ turbo Poncho hp, we got two different 305's. One with a carb and 145 hp. The other had Cross Fire Injection and made a ground thumping 165 hp, with an auto only.
The 301 Turbo was not the be all and end all of Pontiac engines, but it would have made for decent performance in the lighter 82 Trans Am. The Buick turbo V6 wasn't worth a damn at that point, but they developed it into a pretty damn good engine. Who knows what the Pontiac V8 would have become.
Pontiac was left with only one engine: the boat anchor, Iron Duke 4 cylinder.

[The Mighty Duck]

So if in the near term, GM dealers (in the U.S. at least) are reduced by 40-50% can you imagine the stress on those remaining dealership service departments? I haven't heard anyone mention anything about GM service departments going hungry like the sales departments. Funneling all those service customers into almost half the dealers won't make for happy service experiences.

Well, all of those dealers that will be closing will still have trained and experienced staff, so I imagine some of those might move to the remaining dealerships and offload some of the overflow.  The biggest problem will be with physical space, I should think.

Not a lot you can do there, though.  Depending on what happens to some of these dealers who fail, maybe GM will offer "authorized service centres" - automotive centres certified to perform warranty work, but not attached to a GM dealership.  I'm sure some of these dealers will still exist as used car lots or with a new franchise, and if they can hang on to some of their GM service work, that will make customers happy and ease the burden for the dealers...

[inco]

When one door closes - another one opens and an opportunity is created.

The work is still there, or at least the need for people to do the work and so auto service centres could be springing up all over the place.  CTC could seize that opportunity in Canada.

[PJungnitsch]

For the past 5 years GM has declined to renew the franchise agreements of about 6 small GM dealers within 50 km of Owen Sound.  One of which was a hugely popular GM heavy truck dealer.  It was baffling to me.  PPL in small towns do not care in the least about the appearance of the dealer or whether or not the service reception is drive in.  These were some of the reasons given for the terminations.

I remember that, dealers had to invest in the large 'airport terminal' style building, and if they didn't they were out. Also not sure about the advantages of this for GM, or of trimming the dealer network now. There was a good talk on that on TTAC, and one small dealer chimed in that all his contact with head office was with phone and internet anyway, there hadn't been an official 'GM' person on site in five years.

The large amount of dealers has been a huge advantage for GM (for all the domestics, actually) in rural areas. When my brother was looking at pickups the 3 hr drive to the Toyota dealer neatly crossed that one off the list.

[Cord]

Well, all of those dealers that will be closing will still have trained and experienced staff, so I imagine some of those might move to the remaining dealerships and offload some of the overflow.  The biggest problem will be with physical space, I should think.

Well ya, I didn't expect that all the staff would be vaporized by a closing. 

Despite its recent misfortunes, GM has still sold a ton of vehicles. I know in my neck of the woods, most of the GM service depts are already running at full capacity. It's not like they are all half empty and can absorb all the remaining service business. The opportunity for additional service centres is certainly there, but then there is the ongoing problem of independent service outlets not having access to, or having to pay huge amounts for the proprietary equipment needed.