GM has addresse dealer ADM (for Z06).. your move Porsche (for GT3's etc.)
 

well, for all of us who have wondered if it was possible to address and or "solve" dealer ADM (in quotes because many of us have come up with half-baked but earnest solutions to dealer ADM).. GM, (yes General Motors).. has just issued a letter to it's dealer network that seems to directly address the ADM issue for the Corvette Z06 (and other upcoming high interest cars). It seemed so simple to many of us who have been watching, suffering, agonizing even over this issue.. that something should be done, but we kept hearing that because of US franchise laws, "nothing could be done". Porsche appeared to either not care or not be able to do something about the situation, and many lifelong Porsche customers were left with a very bad impression of the brand in this respect. It seems though, that this apparent impotence was more akin to unwillingness to act. I'm totally impressed with the letter GM just sent out to its dealer network.. now whether it has teeth and how they enforce the letter remains to be seen, but they clearly have set a precedent that GM will discipline dealers who tarnish the GM brand by adding ADM and other practices outlined in the letter.

"it has come to our attention that some of our dealers do not support a positive sales experience for their GM customers...." and it goes on beautifully from there.... (protected text so can't copy paste.. click on the link for more) here is the letter.. it's so beautiful it brought a little tear to my eye. This is a company with some cojones!!

Corvette Price Gouging: GM puts dealers on notice



so, after reading this, we can finally point to Porsche management with our little index fingers and ask "Et Tu Brute?"

My take on that is this: dealers stop giving people allocations then upcharging them once the car arrives with a sudden unexpected and unagreed to ADM.

It’s a good letter. Porsche will not do anything. Im
happy to be working with a dealer that doesn’t engage in shenanigans.

Didn't ford send out something similar recently as well?

It's interesting language and I'll be interested to see how the dealers respond. Is it a violation, per the article, to ask for than MSRP? Or is the violation taking an order and then asking for an ADM at delivery, having not disclosed it previously?

Assuming it's about ADMs as a practice, meaning dealers are being asked to not exceed MSRP, then I question what tactics will arise to award an allocation? I'm sure the customer that has a relationship and a list of GM products takes priority. So it will be like buying a Rolex. If I want to get an allocation I need a Silverado, a Camaro, a Cadillac, a Cadillac CTSV, and then I can get a Corvette and then finally a Z06?

How would this potentially impact lightly used cars? Does the market adjust down since there aren't ADMs or do dealers find creative ways to sell as used and af market value.

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Not enforceable by GM.

Very interesting development. GM already allocates Corvettes based on how fast dealers sell them in an effort to discourage swinging for the fences on markups. But this is a shot directly over the bow.

I just called one of my local dealers last week and their Corvette specialist told me that they plan to just order cars for the floor then sell them on Ebay. Guess I'll be giving him another call pretty soon here to see how that plan changes.

The proof in the pudding whether this is more Bark than Bite will be GM enforcing this (or not). I can see them going after dealers' repeated use of brokers - which is a violation of terms. However, charging over MSRP is not a legal violation of said terms, which state: "...dealer agrees to effectively, ethically, and lawfully sell..."

Clearing inventory is effective selling.
The "S" in MSRP stands for Suggested, in an open / capitalist market charging anything above/below suggested does not constitute unethical behavior.
As long as sale doesn't violate any local / Federal laws (e.g. transacting with a sanctioned entity), it is a legal sale regardless of pricing.

This may be nothing more than a PR statement to appease the general buying public, or perhaps GM is serious about enforcement. Time will tell.

They're not saying it's illegal to sell over MSRP, they're just saying that they can snatch those allocations if they get too greedy with the markups. That is totally within GM's power.

If this were about PR, they would've put it in a PR statement rather than a letter to the dealers. The question is how aggressively they'll enforce this, if at all.

Not disagreeing with you, in fact we are stating the same thing / posing the same question - if/how far this will be enforced, if at all.

As far as PR, some of the best Public Relations campaigns are not directly 'public'. How many hours did this dealer-only newsletter take for us plebes (and the rest of the general public) to see and thread-start it...

If you actually read the article, it doesn’t necessarily say GM is not OK with ADM… it just says the ADM shouldn’t be slapped on like a surprise to the customer order. GM seems to be OK with dealers charging ADM as long as the dealer is upfront about it.

this is nothing burger. 99% of first hand and second hand experience at Porsche dealers is that they are upfront about ADM

The exceptionally simple solution to this from a dealers perspective is to title the car, which then makes it a used car, and then sell it for whatever price they want. Even if GM wanted to enforce ADMs, I don't see how they could impact that scenario unless they are planning on fighting dealers in court.

Z06 vs GT3 production numbers are also very much apples and oranges. In a year or two, you will be able to walk into a Chevrolet dealer and buy a Z06 with zero issues. Just like the C7. IMHO, if dealers want to make a little markup on the “got to have it first” crowd, I have zero issues with that.

However, I doubt there will ever be a time in the 992.1 life cycle where you can just walk into a Porsche dealer and they will have cars just sitting and/or allocations that can’t fill.

Totally different reason for the ADM games with Porsche.

Yup that happens now ………..that’s how I got my Speedster dealer purchased and titled with 18 delivery miles slapped on 200K ADM January 2020, and it was Covid nothing selling so I offered a cash buy June 2020 they said bla, bla. Next day called me to come get it in one hour MSRP, and sold a 2nd one they had on the floor at MSRP. Only thing I got nailed on is 6 months less warranty as it was punched to show a sale. Dealers will always have a legal way around these letters, you’re seeing corporate PR it’s not GM but it’s our dealers being bad.

Dealers have the upper hand in good economy, and we have it in the bad so it’s all timing. Hell GT3 RS 4.0 went for MSRP in 2011, but you didn’t have the everyone wants one 11 years ago …..CGT’s were selling sub 400k a few years ago now 2M ……..it’s all timing and how crazy people want something. Someone will always get stung at the bottom of the pyramid it’s the same movie, and many want to roll the dice on a GT3 is a 300k car it’s not, but it is to the person that wants it and see’s it as sunk cost.

My take is Porsche will keep chugging alone and march to its own tune. Following GM? Not holding my breath for this one:corn:

John