Some models of vehicles are not built in unlimited numbers.

Dealers only get to order a certain number of hard to get models.

It isn't an matter of "open season". The order doesn't trigger an allocation. The dealer's past performance determines the allocation of hard to get vehicles.

 

Okay, in a limited production case, that also makes sense. Camaro is neither constrained nor limited production, right?

I'd like to limit the remainder of this discussion to situations that apply to Camaro; specifically, unconstrained, non-limited production vehicles.

Regardless of a dealer's past performance, it seems to me that a standing ABNA order should receive priority allocation. In my eyes, that's a paying customer. Am I missing something here?

Secondarily, doesn't the method you describe doom a dealer to repeat his past performance?

 

BTW, Paul, I'm not trying to be a pain here (just trying to understand something that doens't quite make sense to me), and I really appreciate the fact that I'm getting actual responses from an actual GM employee. Thanks!

 

Limited production? No, but finite, particularly on a week to week basis.

Sold orders are a priority.

Regarding the "Am I missing something?" question... in a sense you are.

Chevrolet wants dealers to be the best they possibly can. That doen't mean just in sales, just in service < such as making sure techs are up to date with training and proper tools are on hand for some specialized vehicles>. Customer satisfaction scores play into things that are important for dealer to persue in GM's opinion. GM doesn't sell cars directly to end users. They sell to dealers. There's essentially 3 parties involved every vehicle sale: the manufacturer, the wholesale <dealer>, and the retail < end userwho buys from the dealer.

Let's call this a hypothetical example:

Dealer 1 has been exemplary in all areas of CSI. Fabulous facilities all around and in every part of the dealership property. When Corvettes sales were off, like 1996 Dealer 1 purchased his own allocation of Corvettes and any allocations other dealers didn't want to take and who would gladly let Dealer 1 take the credit for selling. Dealer 1 has a Corvette club which meets at his facility. Dealer 1 has purchased all of the tools and trained all of his techs to high expertise in the whole Chevrolet line. Dealer 1 is sure that when the next gen Corvette comes out it will be a hot item.

Dealer 2 sells 2 Corvettes a year. Dealer 2 is consistantly under or just making his sales goals. His CSI scores need attention in some key areas. When Corvettes were slow moving, he sold his allocation to Dealer 1. Dealer 2 believes Corvette is a dead deal today so he has no interest having anything that takes some work to sell.

Scenario is now 1997. Corvette is a huge hit, folks that would never buy a 'vette now have to have one. Corvettes are selling at dealer auctions for MSRP.

Dealer 1 has 150 customers that want to order, Dealer 2 has 150 customers that want to order. Chevrolet will be making 100 Corvettes that month... Who do you think should get them? Which previous behaviour should be taken into account?

IMO it's Dealer 1 that deserves the consideration, and were I an end user, I'd have a better chance of getting what I want from Dealer 1... so I should deal with him if I'm in a hurry.

Dealer 2 can get a higher allocation in the future with a bit more Dealer 1 sort of attitude.

GM doesn't want to not sell to all 300 customers, but when demand is very high, that's not always possible.

Customers have every right to buy from the dealer they choose. If you choose to buy from Dealer 2, waiting is part of that choice. Dealer 2 can buy a car from Dealer 1 and then sell to the customer. Nothing stops that but profit incentive.

 

What an excellent explanation! Thanks very much. My light bulbs went on.

I ordered a Camaro from Don Ringler in Temple, Texas. Chevy will never know that *I* ordered a Camaro. Don Ringler Chevrolet will order (7? 10? 13?) Camaros in June for Don Ringler Chevy to sell to customers, and one of them will be exactly like the one I spec'd out. Don Ringler Chevrolet even has an idea of who to offer this black 2SS to first, when it comes in. Me.

So, a dealer is allowed to order "x" numbers of Camaros every month. Some are "suggested" by customers, who put down a deposit. Others are the dealer's best guess at what they'll want on their lot in a few months, that customers will ****** up right off of the truck. My deposit gets me "first dibsies" on the black 2SS/RS with the stick and no sunroof, but if I take a pass, they'll offer it to someone else.

And, ordering my car is, in no way, a contract with Chevrolet to build it, or for me to buy it.

Right?

 

Okay Paul, that makes sense, but I still have one question.

Why not allocate further into the future, until all acknowledged orders are allocated and have been assigned a target production week?

Maybe that would entail adding an additional status code to the system that made clear that distant future allocations were "tentative", whereas near future allocations were more certain, but that shouldn't be a big deal, and all it would do is increase customer satisfaction (how many threads have you seen here where people were complaining that their dealer couldn't give them a TPW?)

 

Did not have time to read thru the entire thread but here's the deal on Allocation.

GM, nor any other Manufacturer can sell new Cars or trucks to the public directly. The customer must go thru a dealership. That's both Federal Law -- and each state has similar laws. They're called Franchise Laws and they apply specifically to motor vehicles.

Now - under federal law and state laws, the Manufacturer must 'allocate' product in a 'fair and equitable' manner. That 'manner' MUST be defendable in any Court of Law. Therefore, each manufacturer has its ways of allocating product and invariably it involves 'sales history' -- so that 'equity' remains thru the system. If equity does not remain, the dealer or the government may sue under state statutes -- and it CAN be punishable by fine or - and I'm not kidding -- imprisonment! (ask the guys at Honda that went to Jail several years ago.....)

Let's say we have a car that is not selling well. In that case, the mode of allocation may be "8 weeks sales" -- meaning that each dealer's 8 weeks sales for that particular vehicle is broken down as a 'percent to total" - so dealer "A" gets allocated on his performance to the total. If the car isn't selling and you put a sold order in, the chances are it's going to get picked up quickly.

THE PROBLEM is when demand outstrips availability of product. We have taken over 21,000 "sold" orders for Camaro. We have been building somewhere around 280 cars a day............do the math and you will see that demand far outstrips availability. (keep in mind that dealers also have stock orders that they're wanting...)

In the case of a 'new' product that hasn't been on the market before -- or hasn't been on the market in quite some time, you might look at historic Passenger car sales as part of the equation. (bigger dealers -- more cars..)

You'd probably also want to look at the registrations for each dealer's 'area of responsibility' -- which is defined by census tracts.......to determine WHERE people have more propensity to buy a car in a particular segment.
For instance: people in Texas have a MUCH higer propensity to buy Sport Coupes than those in North Dakota.........

Dealers were given a "guide" or "allocation" last fall just prior to opening the order tables. (first part of October) At that time we told them that this 'guide' or "allocation" would be their estimated number of vehicles that they would receive thru the third quarter. IF we build more (ramp-up goes faster than planned) we'd build the allocation and then provide more guide.

Because of that - some dealers filled their allocation with 'sold' orders - and some said "I'll take a few and then I want the rest for stock" -- and then a few said "well I received 10 and I'm gonna take 15 sold orders" -- and that's where the problem starts -- if the dealer exceeds his or her guide, they may not receive all of their sold orders by the third quarter.


SOOOOOOO.........the dealer who says "I can't take your sold order" is actually to be admired -- because they aren't taking your order and then making you wait. And trust me - it pains them to do so - as dealers need every sale they can get -- PROFITABLE sale, that is......

NOW __ THAT SAID - dealers exceeding guide are very far and few between......just because your 'sold' order has not been scheduled yet does not mean your dealer isn't being truthful with you or that he or she oversold their guide/allocation!


Yes..it's frustrating -- but this happens anytime a 'hot' car or truck hits the market. the same thing happened when the new Mustang came out a few years back - the same thing happened to Challenger (altho not as severe as Mustang or Camaro as they did not rec' the number of sold orders as I recall....)

A few people have reminded me that I made a prediction last year that we'd have a bunch of upset enthusiasts this year because we can't build Camaros fast enough.............I was right. (and I hate to be right sometimes...)

 

I didn't realize that the allocation process was governed by law. Interesting.

Why is that admirable? If the customer would rather order and then wait, why prevent it?

If a customer comes in and wants to order a new Camaro, and the dealer in the question has no allocation to cover it, I think an admirable dealer should say:

"We don't have an allocation for this vehicle right now, so the best I could do is guess at when you'd actually take delivery -- no promises. However, if you want to submit your order anyway, I'd be glad to enter it into the system for you, and I'll call you as soon as it's allocated and a TPW has been set."

What you're suggesting is (I think):

"I'm sorry, we have no allocation for your order, so I can't accept it right now. I'll give you a call when we get an allocation and we can talk about submitting an order then."

Personally, as someone who eventually wants to buy a Camaro, I'd be much happier with the first response. I'd feel like the second guy was making me jump through hoops.

 

You bring a different point of view to this.

Some people are not willing to wait -- and if the dealer does not have allocation, they're not going to see the car for a while.

I guess that I agree with you that the dealer should say what he said -- but if the customer wants a Camaro SOON -- then they need to find a dealer with allocation left.......

 

Fair enough.

Thanks for your replies, Paul and Scott. Very informative.

 

While I understand the reasons stated for the current allocation system and the laws Scott mentioned that drive it, the process is still flawed because it puts the priority on the dealer-manufacturer relationship instead of the customer.

Quite simply, I want to go to my local dealer, or one that I have a trusting relationship with based on past dealings, negotiate a good price, and buy (or order) the car. A system that forces customers to deal with multiple dealers simply to find one that can get me a car is not keeping the customer's interests first.

Why should the dealer's ability or willingness to meet his past quotas be made my problem as the customer? If GM so undervalues my relationship with my dealer of choice that they employ an allocation system that forces me to go just anywhere to find a dealer that can order me a car, then what do I need a dealer for at all. Hell, you might as well set up the web site and let me order it online. At least this way I am not forced to buy from a dealer I don't know or like simply because he is the only one who can get it in a timely fashion.

Internal business issues between dealers-manufacturers-legislators should not inconvenience the customer. Just my humble opinion. Good conversation though. I learned a lot about how dealers work and this will keep me from getting frustrated when I eventualy order one.

 

economics, ughhhh........ just as confusing as my girlfriend

 

Agreed....I would love it if I could just order online, get a reference number, go down to the closest dealership (or one I like), sign papers/pay deposit and go.

 

Here's another thought. Maybe some of these dealers who won't take orders are on the list of dealers who are to be closed down. GM might not be excepting orders from them anymore. Most of the dealers that are to close haven't been announced yet. Here are a couple websites with a partial list of dealer closings

http://www.edmunds.com/industry-car-...ps-closing.htm

http://www.huffingtonpost.com/2009/0..._n_203860.html

 

I don't disagree with you.......

.......BUT -- until the consumer says to their elected officials: "Enough is enough! Change the laws NOW..." - -- it isn't going to change.

The manufacturer has tried and tried to change laws - and they get MORE restrictive, not less!