By on January 24, 2012

Some car dealers are missing the bad old times when Detroit was preoccupied with problems at home. Carmakers again have the bandwidth to look at “the channel,” and some don’t like what they see. Suddenly, dealers find themselves at the receiving end of harsh criticism. Both Chrysler and GM dealers are receiving  a derriere chewing.

Jeep, Ram and Dodge landed at the very bottom of the latest J.D. Power Customer Satisfaction Index (CSI) index. Sergio Marchionne is not amused and tells dealer to shape up. “We’re not top league”, Marchionne told Automotive News. “We moved up. But that’s not true of the customer interface. We’re doing well, the dealers are doing well, but they’re not doing well with the customers.” Dealers blame the fact that Chrylser no longer rewards dealers for meeting company standards. Dealerships that were up to snuff could collect up to $200,000 per quarter. With the program suspended, dealers must excel for free.

GM has another problem: GM dealers are ordering too many cars. Automotive News [sub] reports that “General Motors is cracking down on dealers who it says are “gaming” its vehicle-ordering system to finagle more cars and trucks than they deserve.” GM says it has uncovered “significant ordering and reporting abuses” by dealers who are trying to get more cars than they deserve. Damn if you do, damn if you don’t. In the olden days, dealers were drowned in cars they had not ordered, now they get rapped for ordering too many cars.

 

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29 Comments on “Chrysler, GM Rap Dealer’s Knuckles...”


  • avatar

    “Dealers must excel for free.” What a surprising concept in a capitalist system! One would think they would excel out of self-interest.

  • avatar
    Astigmatism

    Car dealers: the teachers’ unions of the automotive world. This is the fruits of years of political donations and gaming the system so that manufacturers don’t have the right to terminate their own dealers. “Pay us $800,000 extra per year, or the customer experience gets it!”

    • 0 avatar
      OhioPilot09

      I hope you think a little more before you compare teachers to car dealers…one is a college grad (masters require in many states) who is usually underpaid working with the future of America (or trying to but the standards usually get in their way) while the other tries to upsell you and manipulate you when buying a car…I don’t see the correlation. Teachers need to have union support or they will be given even worse pay and then we will get even worse teachers, dumber students and a worse off America…if you underpay car dealerships you go down to your local McDonald’s and pull some guy off the fry machine, cars still get bought.

      • 0 avatar
        Toad

        Not to hijack the thread, but teachers are not underpaid.

        Argument 1 is that there are usually over a hundred applicants for every position; if teachers are underpaid this would not be the case.

        Argument 2 is that the quit rate is very low after two years; people don’t leave the profession once they have decided they like it. If teachers thought they could make more money or have better working conditions they would leave the profession.

        Argument 3 is that the benefits, pay, work days (around 200 per year), iron clad job security, unrivaled pension, and holidays that match children’s schedules are very valuable to many people; see arguments one and two.

        I like teachers (and have many in my family) and don’t care much either way about car dealers. But saying teachers are underpaid does not match up with reality.

      • 0 avatar
        Number6

        Actually it’s a fair comparison, though I don’t lose my house if I refuse to support a particular dealership on a continuous basis, whether I need a car or not.

        If you think a teacher’s union doesn’t upsell and manipulate, particularly around budget-voting time, you’re not paying attention. It goes on all the time.

      • 0 avatar
        OhioPilot09

        1- There are no facts to back that up. Who says the 100 applicants just wanted to be a teacher because it is what they love, not for the money.

        2- Quit rate is low EVERYWHERE in this economy, who will quit without some guranteed job? Also, when you spend 4-5 years getting a teaching degree there honestly isn’t that many other jobs you can do but teach so of course the quit rate is low.

        3 – The vacations are nice but please go look at comparative salaries for master degrees then come back to me. Also, teachers PAY for their great benefits…my wife’s (teacher) health insurance was 3x as expensive as my annually, but the benefits were better.

        Either way…dealers suck.

    • 0 avatar
      Ralph SS

      How do we, in just a few comments, go from discussing the given subject: mfr.’dealer relations for GM and Chrysler; to teacher pay?

    • 0 avatar
      naterator

      Teachers ≠ Teachers’ Unions.

  • avatar
    dejal1

    “dealers must excel for free”

    Very sad. Tells you a alot about the dealers.

    “Dealers blame the fact that Chrylser no longer rewards dealers for meeting company standards.”

    How about Chrylser changes that to “sanction dealers for NOT meeting company standards”.

    • 0 avatar
      acuraandy

      I’d go even farther. How about ‘take care of the customer or LOSE YOUR FRANCHISE’.

      Why did we (and the Canadians) bail them out again? Oh right, so a bunch of lazy asses could keep their jobs in perpetuity…and this article proves it.

      • 0 avatar
        Byron Hurd

        The whole “lose your franchise” thing will never happen.

        Baruth actually wrote a couple of really good “Avoidable Contact” pieces about the dealer-manufacturer relationship when he was still a regular at SSL.

      • 0 avatar
        carbiz

        … yeah, because too many of them are sitting in the glass palace at their Honda/Toyota/Kia store, that was paid for by the $$$ they earned hocking Fords and Chevys, counting their cash. Why would they give a damn about the customers in their Detroit store? The sheep are lining up to buy the Kias and Hondas they are hocking now.
        I’d like to see someone dare do a study of how many GM, Ford and Chrysler stores went down in the past decade because their former owners were too busy with their foreign acquisitions.

  • avatar
    getacargetacheck

    I wonder if these dealer CSI scores are like the product quality scores from JD Power and others where there’s not a lot of difference between the very top and the very bottom? I have had experience with three different Jeep dealers over the last 6 years, and each one of them has been about the same or a little better than the BMW, Honda, Ford and Toyota dealers I have dealt with — at least the service departments.

  • avatar
    BunkerMan

    The local Hyundai dealer is a good example of this. They sell loads of cars, since Hyundai is quite popular around here. However, their service is so horrendous that the Better Business Bureau issued a warning to consumers not to purchase from them. I have gotten screwed by their service dept. and at least 3 friends have had similar experiences (one of them took the dealer to court and won).

    Once the BBB got involved, their sales dropped off a bit and Hyundai Canada noticed. The rumour is that if they don’t shape up, they’ll lose their franchise rights.

    Needless to say, when it came time to buy my Veloster, I drove for 1.5 hours to the next closest dealer and couldn’t have been more pleased with how I was treated.

    • 0 avatar
      JCraig

      I had one bad experience with a Hyundai dealer I took my car to for a warranty repair. Afterwards Hyundai called and emailed me for a survey, took it and the next day got a voicemail from the GM of the dealer. I didn’t bother to follow up with him as I’ll be going to the another dealer across town in the future. But it was nice to see the manufacturer that involved in the dealer experience.

      • 0 avatar
        geozinger

        “But it was nice to see the manufacturer that involved in the dealer experience.”

        That’s because they have to. Back in the early 90s, I worked at a Toyota dealership and we ‘gamed’ the survey system. The dealership’s choice of inventory depended heavily upon the feedback of these new car owner surveys and our Manager was not about to lose his allocations, come Hell or high water.

        For a while there, I owned about seven Celicas, and an even larger number of Camrys and pickup trucks. How nobody at the survey firm noticed that one person bought something like 20 new cars in a year’s time is completely beyond me, and a testament to how screwed that particular feedback system worked.

        With the advent of email and internet surveys, I think it’s much harder for dealership personnel to fudge results.

  • avatar
    ciddyguy

    Yeah, I’ve heard the stories of some dealers just not seeming to care. One guy recently bought a Fiat and the dealer didn’t even show him the car, just gave him the keys and sent him off. Um…

    Yes, there ARE good dealers but the ones who don’t seem to go out of their way to help/assist the customer etc SHOULD get their knuckles rapped and a stern warning that if they don’t shape up, they risk loosing their franchise and that SHOULD help stop some of this nonsense from the dealer end when it comes to customer service.

  • avatar
    Robert Fahey

    1. I don’t understand the photo, but I’m slow sometimes.
    2. Get ready for a “Warm and Cuddly” ad campaign to massage customer perception about Chrysler dealerships. Well-groomed salesmen holding open the door, playing with kids etc.
    3. CSI is equal parts good rapport and good coaching, as in coaching the customer to check off “excellent” instead of “good.” Of course, you can’t pull that off without establishing rapport in the first place, so it’s all good. Uh, I mean excellent.

  • avatar
    jimboy

    I have probably commented on this subject before, but my experiences at 2 of the local Chrysler dealerships were sub-optimal, to put it lightly. It has a definite effect on my decision to re-purchase a Chrysler product. I went so far as to contact Chrysler Canada myself regarding my treatment by the dealers, and was given the brush off. Politely, of course. BTW, I have never been approached by Chrysler or the dealers for my feedback on customer service.

  • avatar
    Darth Lefty

    “General Motors is cracking down on dealers who it says are “gaming” its vehicle-ordering system to finagle more cars and trucks than they deserve.”

    I don’t understand this. Don’t you deserve as many cars as you can sell?

    • 0 avatar
      JCraig

      Baruth posted this in another comment, very insightful and answers your question.

      http://www.speedsportlife.com/2008/02/08/avoidable-contact-8-dealer-vs-manufacturer-and-the-loser-is-you/

  • avatar
    drksd4848

    Just an aside: I love term Customer “SATISFACTION”. So vague. All based on perception so to speak.

    Essentially, from my point of view as a car buyer it means: The dealer can screw me as much or as hard as they can so long I “FEEL” satisfied.

    • 0 avatar
      carbiz

      Tell me something – could you EVER really know that you got a good deal, or you had been screwed? Honestly. Then don`t worry about it.
      I haven`t been in the business for 3 years and when I decide to get rid of my car, probably in a couple years, I will shop 2 dealers, make my purchase and then sleep very well.
      I had people steal the car, trash us on CSI and whine to everyone that they were `ripped off.` I`ve also had customers pay list and be the happiest people on the planet.
      If beating the dealer is an Olympic Sport, knock yourself out. But I`d rather be golfing….

      • 0 avatar
        drksd4848

        As I had said, “satisfaction” is all perception.

        When I was buying my first new car at the age young 24 – twelve years ago, I was worked over by the dealer and paid more than I should have. Yet, it all happened with a smile I sure thought they were on my side, helping me get the best deal I could afford.

        At the time, I was happy and filled out the CSI survey and marked excellent on all the bubbles.

        But back then I was idealistic and naive. As I became older and wiser I realized I got screwed. The first indication was a check I received from my dealer a year later for $500; part of a class action law suit settlement against them for slipping in a “dealer prep fee” as part of the vehicle cost.

        I’ve leaned more since then.

        Enjoy golfing!

  • avatar
    bobertbill

    Having worked previously at a Chrysler dealership(5 years ago) I can concur with a previous comment about getting “excellent” scores and coaching your customers.

    Our dealer back then tried doing it the honest way, no coaching. We averaged around 90-95 percent of our sales and service customers saying they were very satisfied or completely satisfied. It is a well established dealership with loyal customers and good sales.

    Problem was Chrysler(and Ford I found out later in a new job) were solely focused on Top Box scoring- completely satisfied. We were trained to coach our customers about the importance of a completely satisfied score. I would tell a new customer that when they got the survey, to please score it completely satisfied, anything less and it got docked against me and could result in punishment. If there was a problem notify me before sending the survey in. There were stories of other dealerships offering free oil changes for perfect scores and other gimmicks.

    The results- our scores went up to nearly 100. Problem being, we really didnt do anything different, other than coach our customers into filling out a survey( and getting the really satisfied ones to fill it out- they often just didnt). We were a great store before the coaching, and a great store after the coaching, but nothing about the processes was changed- nor did it need to be.

    Now observing from the outside, I take comments like these from manufacturers with a grain of salt. It they scored themselves on product reliability, warranty repairs, ownership, after warranty adjustments- their scores would be lower than President Obama and near Congresses approval rating.

    Reminds me when our service department manager was all in a hissy(still a good friend of mine) after getting RIPPED apart with all zeros on a survey from a safety recall customer wanting warranty work done for his inop power windows, and loose ball joints on his 03 Ram—-with over 90k on it! Not under warranty, but he- and the dealership – were a holes now according to the customer(who had to be told by our SM to leave for his foul mouth) for not giving free service- after appealing they still wouldnt throw out the survey so it scored against us.

    Man am I glad I not having to deal with all that anymore.

  • avatar
    carbiz

    All the CSI surveys are crap. Every company coaches their customers. When I was in the business, some months my CSI bonus was half my pay! As commissions were squeezed, GM and the dealers were redirecting funds to areas where perception could count.
    A recent stay at a Sheraton Hotel elicited the usual survey:about 15 questions, based on 1-10. The hotel was great: convenient, clean, newly renovated, the service and food very good. Knowing how important these surveys are, I happily filled it out and mailed it within a day or so. Out of 10, I gave mostly 7s, with the odd 8 thrown in.
    Imagine my surprise when I got a call from some person from the hotel chain, wondering why I was unable to give them 9s or 10s. What? If I was carried from my vehicle by seven vestal virgins, who then helped me unpack and bathed me in olive oil – I would still only give an 8 or 9!
    Welcome to modern business schooling. At GM, it was binary code: out of 5 – 5 was a pass, 4 was a fail. It did not matter to us if the customer put all ones and threatened to drive their new purchase through the front showroom window. A one was the same as a 4.

    • 0 avatar
      JMII

      +1 this is totally true! My wife was a manager of a corporate restaurant, you know the one with unlimited bread sticks and salad. Their CSI score made up a good chunk of her pay (and promotions) and yes only “5″s count. Was your food hot? Scale of 1 to 5 – most people are happy at 4, but in corporate’s eyes this is a “fail” grade. Having your life judged on such a fuzzy metric is crazy.

  • avatar
    FINANCEGUY

    The new car service after the sale will always be sporadic when sales people are paid $75-$100 flats per transaction and $300 a week draws against commission


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