General Motors Opens Regional Centers, Expects to Save $2,000 Per Car

Matthew Guy
by Matthew Guy
general motors opens regional centers expects to save 2 000 per car

We know the switch to electric vehicles is changing our relationship with cars – charging, range, et al – but it seems the EV Era may also alter other aspects of the industry for legacy automakers. Suits at The General are suggesting a switch to regional fulfillment centers for inventory will save the company about $2,000 per vehicle.

And, as you’d expect, the plan involves shifting GM’s interaction with its dealers.

What’s the diff? Well, while the plan doesn’t erase the traditional dealer model, it could significantly impact the number of vehicles they have in stock at any given time. Using a regional fulfillment approach, dealers can continue to receive electric vehicles for customer test drives and immediate delivery. Here’s the rub: GM will hold additional EVs at the regional centers. 

“We'll use cloud data and machine learning to continuously scan the order pipeline and available dealer and factory inventory for the best fulfillment option," said Mark Reuss, GM President at a company investor day in New York earlier this week. "We know how this works because we know what vehicles move in certain parts of the country and at certain dealerships."

The end game is, of course, to end a reliance on incentives in order to move metal. Regional fulfillment at GM is envisioned as a way to avoid dealer lots being full of cars that are the wrong color or wrong trim or whatever objection the customer is placing in front of the sales staff on that particular day. Reuss told investors that GM has already opened three centralized EV fulfillment centers —one in the Southeast and a pair in California.

Now, anyone who’s a student of dealer relations – read: Most of the B&B – will have questions. As do this site’s editorial staff, it must be said. Longtime readers will recall Jack and Bark rightly saying the real customer of an automaker is not John Doe but rather the dealers themselves. After all, they’re the ones actually ordering metal (save for the scattered shopper who custom orders a rig) and bearing the cost of these things. Most people know that’s one of the real reasons why an alert salesperson will try to push you into that Oxford White King Ranch they have out front instead of doing a dealer trade for the Atlas Blue one you really want.

Will dealers cotton to this approach? It may reduce floorplan charges and theoretically reduce overhead, though some Dealer Principals look upon a packed lot and good allocation with pride – so long as the units don’t hang around for too many days, of course. And Reuss wasn't giving details on where his team came up with the $2,000 figure. We’ll probably pontificate on this in a future post but, until then, what’s your take?

[Image: GM]

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4 of 77 comments
  • Tom Tom on Nov 21, 2022

    You funny man. Almost ALL Iraqi oil goes to Europe and Asia. If the Gulf War was only about the US getting oil from the Iraqis, how come we didn’t get any?

    • See 1 previous
    • VoGhost VoGhost on Nov 21, 2022

      Oh, Tom, did you really think that our soldiers gave their lives for Kuwaiti democracy?

  • Tom Tom on Nov 21, 2022

    This one? Are you for real? If I put together a crack team of satirists, I don’t think we could match the lunacy and sheer idiocy of that piece. This is pure comedy gold. Well done, my man. I salute you for finding this. I am still laughing.

  • IH_Fever EV charger on a GM lot, probably with a Cummins generator to keep them running. A regular melting pot haha
  • Tassos Wake me up when VW (or any other loser "Legacy" automaker comes up with a "BETTER TESLA" BEV AT THE SAME PRICE. SO far, VW has FAILED MISERABLY AND LOST BILLIONS DOING IT. Its models are way underwhelming and inferior, and cost not much less than the model 3. ANd DESPITE the SCANDALOUS $7,500 tax credit, which is an INVERSE ROBIN HOOD, takes from the average household and gives it to the average BEV buying family, which has an income of $170k+, VW STILL FAILED.ALso notice the so-called "Mobility Officers" at FORD AND Renault QUIT. another HUGE SCAM, Autonomous Vehicles, they wasted 100s of billions (all idiot legacy makers together) and predicted billions of profits, but so far they DROWN IN A SEA OF RED INK with NOTHING to show for it. Morons will be morons, and the ones in this forum will cheer for their failures "AWESOME, WV, Indeed"! LOL!!!
  • Jwee More range and faster charging cannot be good news for the heavily indebted and distracted Musk.Tesla China is discounting their cars. Apart from the Model 3, no one is much buying Tesla's here in Europe. Other groups have already passed Tesla in Europe, where it was once dominant.Among manufacturers, 2021 EV sales:VW Group 25%, Stellantis at 14.5%,Tesla at 13.9%Hyundai-Kia at 11.2% Renault Group at 10.3%. Just 2 years ago, Tesla had a commanding 31.1% share of the European EV marketOuch., changed their data, so this is slightly different than last time I posted this, but same idea.
  • Varezhka Given how long the Mitsubishi USA has been in red, that's a hard one. I mean, this company has been losing money in all regions *except* SE Asia and Oceania ever since they lost the commercial division to Daimler.I think the only reason we still have the brand is A) Mitsubishi conglomerate's pride won't allow it B) US still a source of large volume for the company, even if they lose money on each one and C) it cost too much money to pull out and no one wants to take responsibility. If I was the head of Mitsubishi's North American operation and retreat was not an option, I think my best bet would be to reduce overhead by replacing all the cars with rebadged Nissans built in Tennessee and Mexico.As much as I'd like to see the return of Triton, Pajero Sport (Montero Sport to you and me), and Delica I'm sure that's more nostalgia and grass is greener thing than anything else.
  • Varezhka If there's one (small) downside to the dealer not being allowed to sell above MSRP, it's that now we get a lot of people signing up for the car with zero intention of keeping the car they bought. We end up with a lot of "lightly used" examples on sale for a huge mark-up, including those self-purchased by the dealerships themselves. I'm sure this is what we'll end up seeing with GR Corolla in Japan as well.This is also why the Land Cruiser has a 4 year waitlist in Japan (36K USD starting MSRP -> buy and immediately flip for 10, 20K more -> profit) I'm not sure if there's a good solution for this apart from setting the MSRP higher to match what the market allows, though this lottery system is probably as close as we can get.