By on January 13, 2010

Reuss's Revenge? (courtesy:daylife)

GM has a tough row to hoe in 2010, with the launches of key products like the Cruze and Volt going on sale, an IPO to worry about, and a sales slide (down 30 percent for 2009) to reverse. Still, according to GM’s new North American boss Mark Reuss, navigating the congressionally-mandated dealer arbitration is the top challenge of the coming year. At a speech last night, Reuss told reporters from Automotive News [sub] that:

I welcome this as an opportunity for GM and the dealership network to go through a change in our network with integrity,

As opposed to the arbitrary bankruptcy-era dealer cull?

According to Reuss, the other challenges on his list have more to do with the bread and butter of GM’s business, including “marketing GM’s vehicles and brands and improving customer relationships so that Americans have enough confidence to buy a GM model.” Reuss explains that “that equals profitable retail share growth.”

Still, as TTAC has reported, and Reuss confirmed to Bloomberg, profitable retail share means fewer discounts, although The General is still dropping prices on such allegedly “hot” cars as the Malibu and CTS sedans. Is there a difference between dropping a price and putting cash on the hood? If Reuss thinks so, there’s been nobody to ask him yet.

Meanwhile, GM is still addicted to incentives, using cash on the hood to move new models, old models, strong sellers and old dogs. Until that gets fixed, bringing up transaction prices while retaining volume remains a challenge that should at the top of any GM exec’s list of things to do in 2010. After all, bloated inventories and forced discounting is the biggest strain on relations between GM and its dealers, according to executives from AutoNation and Group 1 dealer groups speaking to Automotive News [sub].

Instead, GM is looking at more production to reach what Sales Boss Susan Docherty describes as an ideal of “at least” 60 days supply of vehicles like its Theta-platform compact CUVs. BusinessWeek reports

GM used to “refuse to add capacity” for specific models, Lutz said. “This is why we have never been able to add market share, because we wouldn’t roll the dice and go with the winners.”

Perhaps, but overproduction also caught GM in the brand- and market share-destroying cycle of inventory binges and incentive-driven purges. Given the uncertainty around the larger auto market for 2010, and GM’s market share, erring on the side of caution might not be a horrible idea.

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8 Comments on “Dealer Arbitration GM’s “Top Challenge” For 2010...”

  • avatar

    Just a quickie, but is the name Reuss pronounced “Royce”, as I’ve been reading it, or is it pronounced “Roose”?

  • avatar

    I hate to veer off topic..

    But this guy doesnt look too thrilled to be in a dark suit…

    On the right side of the car (pic probably taken during his time in AUS).. with the seat JAMMED rear far up and the interior.. matching his suit.

    The vehicle is probably the Falcon competitor for Ford of AUS, might be one of the top end sport models.. with that georgous maw in either orange or blue.

    But does that REALLY explain the lack of color, materials and design in the interior?

    Its just like the Vette.. expensive to purchase.. with an interior that doesnt fit.

    • 0 avatar

      Sure, the Vette’s interior doesn’t really match its price tag, but that’s because its performance exceeds it. The Corvette is one of the best performance values around, who gives a damn what the interior looks like? Besides, there is a leather trim package you can buy that spruces it up quite a bit.

    • 0 avatar

      No. That interior is from the Holden Coupe 60.

  • avatar

    Did matching the Chevy dealership floor tile in Seattle and Wichita fall from grace already?

  • avatar

    This dealer arbitration thing is just going to slow GM down even more.  Pity really.  And their unique brands for every market approach seems antiquated in a globalized world.  The “One Ford” model is just going to eat GM’s lunch even further.  And GMC, Buick and Cadillac may have decent product but the image and marketing sucks which will not help these small brands gain traction.  And maybe the product isn’t all that great either: really, isn’t the XTS just an AWD LaCrosse with a bigger trunk?  Meanwhile, Chevrolet (in essence GM) flounders with hype and promises and incentives.

    • 0 avatar

      The XTS is just as much a LaCrosse with a bigger trunk as the ES350 is a nicer Camry.  I don’t think people would say that about an ES350, and I don’t think people will say that with the XTS comes out.

    • 0 avatar

      The ES350 is often called a fancy Camry.  The XTS’ problem isn’t that it’s a big, snazzy LaCrosse, it’s that it’s a big, snazzy LaCrosse being pitched as a E- or S-Class competitor.  Were it an ES competitor, I don’t think anyone would care, but GM’s erstwhile ES/TL competitor is the Lacrosse itself.
      Are you implying the Lacrosse competes with the XTS?  Because that would be so GM.

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