Maybe GM Can't Sell Cars Because Its Dealerships Won't Sell Them
Consumerist reader Chris decided to take advantage of GM's please-buy-a-car Employee Discount sale that we wrote about yesterday, so he headed off to two different dealerships in the NY/NJ area. What he found were deserted showrooms with salesmen who ignored him or argued with him over the existence of specific models he'd looked at online. He adds, "tonight I’m off to Toyota for some hard numbers on a Corolla and Camry."
"Why GM cant sell cars: What employee pricing cant fix" [www.schiffner.com]
(Photo: spcummings)
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When my Dad bought a GM car back in 1984, salespeople fought over the chance to get to him, each one knowing that there was a fat commission in it if they closed the sale.
In 2004 when he bought a GM car, he basically had to find the car he wanted on the lot, drag a salesman over to it, and demand that he be charged no more than the manufacturer's recommended price.
The thing is, when the cars stopped selling, GM did what every good company does: fire the people who actually interact with the customers, and upon whom the entire business depends. This way executives could continue to collect huge sums of pay and then blame the fact that their cars aren't selling on those evil Japanese and their tiny, fuel-efficient vehicles.
to be clear, his shopping experience had nothing to do with the sale in question, he just got idiot salesmen.
The sale specifically includes 2009 Chevy Malibus and Pontiac Vibes because the 08 stock is extremely limited already so perhaps there is no stock of certain trims.
For 2008 there was no four-cylinder LTZ. For 2009 there is.
For those who don't know I'm an editor at carsdotcom (not spamming)
@jamesdenver: It's off topic, but, I figured someone would ask. Let's just not derail the whole comment thread, so any further comments, let's take to email. To briefly answer, no; while I have let people back who were willing to change their problem behavior, I do not let people back who insist that they should be allowed to continue.
As someone who deals with a lot of consumer stories you do hear quite a lot of negative reports from Toyota dealers (Honda too just not as many) as you do GM or Ford. I think it is the negative experience that gets told most, as Consumerist readers know. I think everyone agrees the dealer experience could be better.
A long time ago, before I knew any better, I decided that I wanted to make my first car an American car. I was 23, a year removed from college, and driving a 7 year old Geo Prizm my parents let me have. I drove to the local GM dealership to take a look and possibly a test drive.
I honestly can't remember what model I wanted to test drive, but I remember that it took a long time to get anyone's attention. Finally, a saleswoman agreed to walk out into the lot with me. I showed her the car I wanted to test drive, but instead of handing me the keys, she started peppering me with questions...How old are you? (23, but I don't see how it matters) Who owns the car you came here in today? (my father, but I'm not planning on trading it in.) Where is your father? (300 miles away in another state. He isn't the one looking to buy a new car.)
After telling me that the model I wanted to test drive 'cost a lot of money' and that I should come back with my father, I bid her good day and never set foot on a GM lot again. Keep in mind that I went after work, was wearing a tie, and really don't look young for my age at all.
Sorry that GM lost my business forever because some bitter saleswoman was likely having a bad day, but that's the way it goes. She did me a favor anyway as I ended up buying a Toyota that was a much better car than anything I could have gotten on the GM lot.
Good luck Toyota. Their cars are certainly better, but I've had issues with their dealers. In fact, when I purchased my most recent car, I bailed on the Camry I wanted because, not one, not even two, but THREE dealers felt like being asshats.
I also went to a GM dealership, and I was pretty much ignored. Does anybody want to sell cars any more?
@backbroken: At 26, I walked into a Lexus showroom, some salesman comes right up and greets me. Tells me to test drive a Rx350. Takes some ID hands me the keys and off I went. The person I was shopping for, did buy the RX350, so it did mean Lexus got a sale by being nice to me.
Maybe that's why Lexus is doing so well.
I was looking at new cars recently and had a hard time getting someone to help me on the lot. I'm not exactly a spring chicken, and I know I looked fairly successful (I dressed "up" a little to look at cars that day, knowing they treat you better when you do". I was also with my SO, and we were very blunt in our intentions to purchase a car that day. (I also told the salesman we finally got that I was pre-approved through my bank but was open to other finance options.)
Due to the crappy service, we ended up getting my car off E-Bay from one of the reputable small specialty dealerships with listings there. It's a beautiful Benz, and I love it. I won't buy a car any other way from now on.
@Rabbi Dave: There certainly is a 4 cylinder version named the Sping Edition Package. It is currently in stock in about 1/2 of the NY/NJ dealers. Features listed off Chevy's website:
Four-Cylinder Spring Package
Available for LTZ, the package includes;
* EPA estimated MPG 22 city, 32 highway with ECOTEC 2.4L engine
* ECOTEC 2.4L engine
* Electric Power Steering (EPS) assist
* Chrome exhaust tip
* 17-inch chrome-tech bight aluminum wheels
* P225/50R17 touring, blackwall tires
I work from home so I usually look like a hobo during the day and jerkoff indie rock hipster (sans girl pants) by night. The only time I dress up is when I'm traveling on business.
I had a fun experience at a Honda dealership standing around in my workout clothes since my local gym is nearby. I had to walk up to the manager's desk and state that I was interested in buying the car and that I dress up like this on purpose to see if I'll be ignored and that I could come back in a Burberry sweater in an hour if that would motivate them more. I love being a dick to people like them.
Anyway, the blogger did himself a favor- fack that whole "BUY AMERICAN" ideal. I buy the best product I can for the best price I can. Subsidizing incompetence because you feel some burning need to "support your fellow American" only screws yourself in the end. Can you really afford a Pontiac or GM in the long run with repair costs and lower resale value?
Companies start up, companies go belly-up. So the cycle goes. It's not my responsibility to prop up bad businesses like GM and Chrysler because they have some plant somewhere in the country. I buy Toyota products because they last forever and I met a semi-genuine salesperson at my local dealership.
glad to see someone point out the fascist hypocrisy of the consumerist. They love to point out flaws with corporations and the free-market, but the moment you step out of line they ban your account. There is no rhyme or reason to the bannings. They do not tell you why you get banned, it just happens.
Realize that the only reason that salesmen ask you questions is to size you up and determine how much they can bend you over for. Despite what you think and despite their sly smoothness, they're not there to get to know you or be your friend. They're getting information to help their own purposes.
Why give them any info? "Let's just focus on this car that you want to sell me. I'm not going to tell you about me, my current car, my payments, my house, my mortgage, what I 'can afford', and if you want to sell me the car, give me a deal."
Not that I'm inclined to buy a new car anyway just to waste 40% of the purchase price in first year depreciation.
Some things you might not know:
-Dealerships sales staff (I'm being generous) are paid from the labor rates of the service department. When you see $90+/hr for rates, a considerable amount goes to the sales department. Sales doesn't work on commission alone.
-Incentives and holdbacks. Know about these and you can use them as trump cards to whack that sales fool. They treat everyone of us like sheep. Kick them back. Not the tires.
-Toyota sales peeps are arrogant. It's a Toyota. You don't buy it, the next (schmo) will. Take that with any car that has some demand (Volkswagon dealers are next: the new VW Jetta TDI...try getting one at sticker or less.)
-Dealerships are selling your information. Even if you test drive. That photoID they copied is gold.
-Dealerships (I'm speculating) may have coerced the manufacturers into preventing direct-internet sales. Imagine car sales without the sales staff! Just go online, build your car, visit a showroom to meet a tech-rep, test drive, order and buy. No more dealerships, just service center. Franchises just like Dunkin Donuts.
-GM deserves a kick in the teeth. Saturn was the best thing and they took it back and now look...OPELS are the Astra. Opels!
@BrianDaBrain: I had to do that with the 08 Honda Fit. I passed on it for a few reasons (kinda drove like a dog, but the 09 gets 10 extra HP, only $500 savings over a Corolla LE) but the most significant reason I passed on the Honda is because I couldn't find a salesperson I didn't think was some scumbag.
It's not even like the salespeople were ripping me off. It's just that they were dumbass dude bros and other typical personalities that stereotypically find a home in sales. I eventually found an older gentleman at a Toyota dealership (after being to 2 that didn't satisfy me) who I actually liked and I gave him the sale.
That's cause Toyota has been selling so much lately it doesn't care anymore. The big toyota dealers in California like Longo are the WORST. They are so closed minded, and are so full of themselves because they know they are the largest toyota dealer in So Cal. Went there once with my brother to check out the new IS350 while I looked at a new Corolla, but they just WON'T negotiate a lower price. Hell, they said that if we can find a better price then just go! What a bunch of lousy people.
Thankfully we found a wonderful dealer at Newport Lexus.
@kingmanic:
My wife had the exact opposite experience at Lexus several years ago. We just bought a new BMW 7 series. We wouldn't even consider Lexus because of that experience. It was similar to backbrokens. They told her to come back with her husband.
@Botticelli711: It's actually pretty much the same with all Gawker sites, but can you blame them?
To get the reader to identify with the angle and tone of the blog, you have to make your comments section echo the blog. Therefore, if you're conservative or you actually think company profits are a good thing, you get muted pretty quick. As you've probably experienced, people will call you a troll just for going against the grain. I personally think that company profits are good because how else would a company grow, pay its employees, provide a good or service, or be rewarded for smart business practices? If a company is bad, I just don't use them. You don't see me crying about McDonalds because I'll stop eating there if I don't like it. The same goes for airlines. When a market is regulated, then you'll see me brew up a crapstorm over a business because you're given no choice whether or not to use them.
Anyway, as you pointed out, it is a sort-of hypocrisy. Gawker wants to make the most ad revenue they can and that involves having a commentary base that is undisrupted and makes the mass of readers feel good about participating. Unfortunately, that means you can't disagree with the general tone of the blog. And if you think Consumerist is bad, you should see Kotaku... >.>
@Norislolz: I have never had a problem at any of the other gawker sites including gizmodo, LH, valleywag or jalopnik. At least those sites bring out the banhammer from time to time.
My girlfriend's parents recently decided to buy her a new car. She wanted an SUV, I protested--to no avail. She wanted a Jeep Cherokee, they told her to start at the bottom.
On a Sunday afternoon, we visited two different car dealerships in Koreatown, Los Angeles; House of Kia on Western, and City Hyundai on Olympic. There we were, a white kid escorting his bi-racial girlfriend around two different lots on the east side of Los Angeles, almost begging for help.
Please forgive the racial undertones, our experience could have happened anywhere in LA. I later learned this when we finally went to a Chrysler dealership in Glendale, even when her father paid for the car with a wire transfer, in full.
@incognit000: "The thing is, when the cars stopped selling, GM did what every bad company does: fire the people who actually interact with the customers..."
Fixed.
We lucked out in March when we decided to trade in the ancient Buick Regal. Stumbling into the GM dealership, we were immediately greeted by an older gentleman that we later found out was a cantor at my wife's parents' wedding and old family friend. Even before we realized this he showed us an '08 Malibu fleet with limited miles that was used as a rental, and we got a pretty good price on a damn good car.
Too bad GM can't have this type of service at all their dealerships. But it is possible, of course.
Maybe I'm dense, but I really don't see these guys censoring opinions all that much, if at all. I got into a big ol' fight a few days ago. Whether I was wrong or right, the other guy and I had opinions that were polar opposites of each other. One of us should have been edited and banned if the accusations in this thread were valid. I'm still here and as far as I know, so is he. Seems like every forum I go to, there's a small group of people (or just one individual) that wants to develop a paranoid admin-conspiracy theory in which the moderators are the internet version of the illuminati, always watching, always ready to quietly have you killed if you say the wrong thing. It's almost always BS.
Anyway, on to the topic of this thread, if I were a salesperson, and GM was busy offering cars that barely, if at all, made a profit, that would mean I wouldn't be getting commission on them. So, either I can work my ass off for no commission, or I can take it easy and sip coffee for no commission. Not a whole lot of people would decide to work hard for nothing.
It would be different if GM would make a good product. "If I work my ass off and sell a few of these suckers, word will spread about how good they are, and then more people will come in to buy them." but no, GM, despite having several years back sent out a letter admitting that pretty much everything they made in the 80's and 90's was crap, and begging people to buy their cars anyway because "they're different now," is still churning out crap wrapped in shiny sheet metal. So really, I'm putting myself, as a salesman, at a further economic disadvantage the more cars I sell. "If I sell 10 cars this week, that's 10 more people who will get pissed off and run around telling everyone they can find how much GM cars suck, and so then I won't even get people coming through the door on the off chance that GM finally decides to do the smart thing and build something good that isn't an ultra limited production Corvette."
Of course, I'd also, were I a car salesman, be working for Honda or Lexus if I could. Quality product = good sales, almost always.
As I posted to Chris' blog:
Car salescritters are mostly generic salescritters who happen to be pushing cars this month. (There are exceptions of course, but it's typically not a career position in the US at least.) They don't want to sell you a car tomorrow or next week, they don't want to put any effort into selling a car, and they CERTAINLY don't want anything to do with an informed customer who knows what they want.
The way to buy a car is to either know that Dealer X has the car you want, tell them what you'll pay for it and let them deal (or not) or to fax or email dealers within whatever distance you're willing to drive, tell them exactly what you want and have them make you an offer. Driving from dealer to dealer subjects you to more and more of the bad salescritters, the law of averages is against you.
@shadowkahn: You don't see it because any dissent is extinguished. If you were in Beijing right now you would think that everything is ho-hum over there too.
@kingmanic: @backbroken:
What backbroken described is what happened to me, kind of. The lease on my Lexus IS was up and I had saved up some money. I wanted to purchase a new 350z, half cash and finance the rest. I went to the Nissan dealership near my dad's (Frederick, MD), and after waiting 20 minutes at the desk, a salesman decides to come over. I explained my situation about the lease/cash/finance, and he chuckled and said, "Yeah, right. You're too young and there's no way you can afford that, let's go look at some Sentras." (I'm 19) I finally convince him to help me look at some Zs but before that, he wants me to fill out some paperwork: Name, address, email, phone, etc etc. I tell him no and he says it's required before we proceed. Something to the effect of 'it helps our computer system recommend a car for you'. Right. I knew what I wanted, and I didn't want a damn Sentra! I tell him where he can shove his paperwork and walk off the lot. Turns out they use that info to solicit the hell out of you (friend bought a car there few months later).
Went back to the Lexus dealership where I originally got my lease. As I was getting out of my car with my girlfriend, Doug-the salesman who sold me the first lease-greets us with warm energy and a smile. He even remembered my name! I tell him about my experience at the Nissan dealership and he was understanding. He took us inside and told us to have a seat while he gets us some coffee. He comes back five minutes later with two Starbucks lattes and keys to a GS. He said he wasn't sure if I was still looking for a Lexus, but this one would be perfect. We test drive and an hour later (she's picky) finalize the deal (he threw in some options free because I was returning and/or the thing w/ Nissan) and drive away in my new Lexus, happy about the purchase. Still occasionally get calls from him asking about the car and if there's anything else I need and whatnot. Overall the best experience I've had at a dealership to date.
Funny, I notice a whole pile of dissent in this thread, that's not even on topic, and uh...it's here and y'all aren't banned.
@backbroken: It's a mistake to conflate "car dealer" with "car manufacturer." It's unfortunate that manufacturers don't exercise tighter control over their dealerships, because the dealership experience for the same make can vary tremendously and you're far from the only person who's sworn off a make (or a whole manufacturer's offerings) because of lousy dealerships.
The low-end sales staff who don't know their product and make money selling options and dealer extras and stiffing your for your trade-in, the finance people who want to screw you on the rate, upsell you on gap insurance, talk you into leasing, etc. are killing the car industry.
It intimidates lots of people that car buying in the US is pretty much a battle. I find that I win by deciding what the car is worth to me, offering less than that and being fully prepared to walk if they're not interested. I have financing arranged in advance but give them a chance to beat it if they can (dealers have only beaten my credit union once in 3 new-car transactions over the last 15 years.) My friends like to take me with them when they're ready to buy, because like the handle suggests I'm a gearhead and I'm not the nicest guy, but I keep it professional.
I don't think you should blame the car company b/c the dealership stinks. I agree that it is ultimately the responsibility of the car company, but to swear off GM because you tried to buy a Malibu and somebody was a dick to you is silly.
Personally, I've been physically accosted at a Toyota dealership b/c I wanted to "think about it." Went to another Toyota dealership to re-test drive, everything went fine.
You can drill this down even further to personal interaction. I've been to a certain Honda dealership 3 times, twice with my parents for my mom's car and once for mine. Different treatment each time.
Lesson learned: buy from the fleet manager, they have the same access to stock as a normal salesman, and all your dealings on the phone/emails
@GearheadGeek: Especially with the "paperwork" games and the payment games. But this is no surprise. You don't need my information to tell me WHAT THE PRICE IS. (I do not like most car salesfolk).
I would have to think GM is trying to prod folks who had thought about trading in/up, but with the economy in the toilet, have re-thought that. Dealers pulling this kind of thing...what can you do? It's not like GM is going to penalize any of their dealers right now.
@SigmundTheSeaMonster: The sales staff you deal directly with at most dealers are indeed dependent upon commission. The ones who are still making a base won't be kept around if they're not moving enough units at a high enough margin to be making the dealership money. Now, the higher-up guys like sales managers and general management, the receptionists, etc. are subsidized by the net on service, but they're probably not in a big hurry to share any of that with the salescritters. Of course there are a few "one simple price" dealerships that pay hourly+spiffs to their sales staff, but my experience is that they're still in the minority.
How innocent of you to think that dealers pressure the manufacturer to keep the manufacturers out of the direct sales business! In fact they get laws passed PREVENTING the manufacturers from selling cars directly, and have onerous contracts keeping manufacturers from selling too many franchises or taking away theirs. One of the problems GM has today is that it's expensive to get rid of a dealer... if they wanted to just make Hummer go away it would cost them a fortune to settle with all the owners of Hummer dealerships. They've already been through it with Oldsmobile. They have too many makes and too many dealerships, and too many of those dealerships aren't friendly welcoming places for the buyers who could save the company.
As long as they have a jumpee for my kids I'll buy anything! (kidding) But you can really avoid the paperwork games if you tell them your price, ask for a yes or no only, then have your child throw up in the finance office. The woman typing almost passed out and did our contract wrong just to get us out. Best lease deal I ever made! Know your facts, be nice, and just get up to leave if they treat you wrong.
A couple of years ago, I pulled into a Jeep/Chrysler dealer to buy a car. The sales guys were out playing football, and basically ignored me until I walked up to a used Dodge Prowler, and all of a sudden, one guy came over, asked if I was interested. I said no, told him what I was looking for, he pointed, and went back to his football game. After 10 minutes, I left the dealer.
I looked online at their inventory, found a jeep that I liked, looked up invoice price on Edmunds, and faxed an order from work for invoice minus rebate to the dealer. The sales manager called me back, said to come in with a check, pick up the jeep. I didn't have to haggle. The sales manager asked if I wanted an extended warranty. I said no, he said OK. I've done that twice, both times it worked.
I saved $6500 over MSRP. And the sales guys were giving me dirty look when I came in to pick it up.
I bought a Ford minivan at a dealer that uses the "Saturn" model. No haggling, lowest price hanging from the mirror, usually within $100-$500 of invoice. The sales people get paid by a satisfaction survey after the car is sold. I get good help at that Ford dealer. I don't get hassled, and I know the price is as good as I would get if I haggled for several days.
@SigmundTheSeaMonster: HUH??? I spent 17 years in the car business, and NEVER, I repeat NEVER saw salespeople getting paid from the service department. They either sold and earned commissions, or earned minimum wage for the hours they worked. (Not for very long, mind you - a salesperson who can't earn a living isn't worth keeping).
@GearheadGeek: I totally agree that car manufacturer does not equal car dealership. But, I've got to go through the dealership to get the car and if you leave me with a bad taste in my mouth, then you have been branded by association.
The first car (used) I shopped for by myself was a Pontiac Sunbird. Guy (redacted) was the salesman (loved the name!) Guy called me 2 weeks after my husband & I came in together and bought it from him, on the premise that he followed up with all of his customers. Then he asked me out!!! What a creep!
@kingmanic:
Lexus was always great to me too. I got into an accident at 20 and had to replace my car. I was looking for a used VW, and a local Lexus dealership had one. Unfortunately it sold before I got there, but they had an es300 that had just come in for a trade - and I convinced them to give it to me for the same price they wanted for the VW.
Anytime I had to take the car in they were nothing but wonderful to me, and when the fuel injectors got plugged up they gave me a nice rx330 as a loaner (for free) while my car was being worked on. If this was the kind of service I got as a used car buying college student, I can only imagine what I will get in the future. They have earned my future business (in med school now, so in about another decade or two I might be able to afford a Lexus again).
@meefer: If I walk in, am personally insulted by irrelevant questions and treated like dirt by a car salesman, who am I supposed to blame? The car salesman is the one of only two things that has gone into developing my opinion of the car company: 1) the branding/quality of the car, and the level of customer service I receive at a dealership. When there are comparable models to any car, there is no reason to stay and get talked down to someone who you are trying to give commission money to. I don't understand fighting with a prick to give him a sale. And if you want a certain car badly enough, order it online.
If you have been to the same dealer 3 times (and I'm assuming one of the times the experience was bad) why do you go again and reward a dealership that puts customer service last on its list of priorities with a sale?
I don't understand it. I will never reward someone who is mean to me with a sale. I can partially understand going to a different dealership of the same brand, but its waste the gas. All their competitors are usually only yards away.
The truth is that most salespeople are actually pretty fucking terrible.
In a previous life I used to be a management consultant (like the Bobs) with a focus on sales for IT companies and it was astonishing how bad most salespeople were. They didn't know how to talk to clients, didn't have deep product knowledge, didn't know how to mirror, had only one "persona" and used it on everyone regardless of circumstance, prejudged clients--that is, evaluated their ability to purchase from their looks, dress, etc.--were too greedy and pushy--or not greedy and pushy enough, again, context is important and one's ability to adapt is necessary for sales.
It was amazing. I would have role-playing sessions with sales people who were in the business for years and they were completely useless. When their sales record was analyzed their successes hovered in the area covered by statistical chance.
From reading this story my guess is that those dealerships are hiring people who have some sales experience and are just basically throwing them onto the floor to fend for themselves.
GM, go hire someone like me (10 years ago). It'll cost you a few bills but you'll make more money with less people.


















Toyota will be a much better value