GM Plans to Crack Down on Dealership Markups of the New GMC Hummer EV
The all-electric 2022 GMC Hummer is the six-figure ultra-truck that General Motors hopes will change the image of electric vehicles forever. As such, it wants to make sure its dealerships don’t mess this up.
GM wants to exert more control over sales of the new Hummer, discouraging markups over and discounts from MSRP and handing out inventory in response to customer orders, reports Automotive News. It’s a bit of a test run for the General as to whether they can get away with more control, but from a consumer standpoint, much of it really sounds like common-sense measures not to frustrate would-be buyers. Clearly, the last thing GM wants is for someone to rage-quit the Hummer sales process to go buy a Rivian or a Cybertruck.
This is all codified in GM’s electric models participation agreement, a copy of which a dealer shared with Automotive News. GM also makes it clear in this agreement how they will limit dealers’ interactions with Hummer buyers. In fact, the first couple years of reservations will go through GMC.com, at which point a dealership will receive only what customers order. There will be none of the usual bulk allotments that we’re used to seeing on dealerships’ lots, so don’t expect to roll up to your local GMC dealer and get to pick from one of a row of new Hummers.
The entire process sounds a lot closer to the direct sales model pursued by many EV startups than it does the usual dealership-based one we’re used to with GM and other more established automakers. Per Automotive News, GM President Mark Reuss touts this plan as trimming the “waste” from its dealership model, blending the benefits of an established, widespread dealership network with the trimmed-down process of online sales.
Part of that streamlining is a callback to GM’s Saturn days: no-haggle pricing. While there probably won’t be discounts, GM is also heavily discouraging dealerships for pulling any kind of “market adjustment” shenanigans. Nothing in the EV sales agreement holds dealers to a set price, however, GM hopes to control markups by setting a specific margin for the Hummer that would remove the incentive to toss on a markup.
Dealerships are already required to make pricey upgrades in infrastructure and training—sometimes in excess of $200,000—in order to sell and service GM’s EVs. Roughly half have agreed to do it, Automotive News notes, and sales of halo trucks like the Hummer could go a long way towards recouping that investment.
That being said, customers are allowed to select the dealerships for their Hummer orders, and there’s no guarantee that dealerships will get a Hummer sale at all. GMC can select a dealership on the owner’s behalf, but the whole process does have some dealerships worried.
“They want you to invest all that money, and they won’t send you any,” one dealership employee told Automotive News. The employee wished to remain anonymous for understandable reasons. “They’re just changing the game here.”
While a dealership will inevitably try to establish some sort of relationship with Hummer buyers from there, GMC’s EV sales agreement also prohibits that dealership from using information from Hummer reservations for anything not related to that purchase. Haters of trade-in pestering rejoice. Dealers, eh, maybe not so much. All of dealers’ communication with Hummer buyers must be manually generated, too—nothing automated.
Joe Aboyoun, partner of the Aboyoun-Dobbs law firm, explained to Automotive News that this will be a test of what’s really allowed under GM’s franchise agreement—and what isn’t. There’s a very real fear that GM will overstep their boundaries, as Aboyoun says that dealers “can feel the breathing on the back of their necks.”
Reservations for the first run of 2022 Hummers filled up within 10 minutes of the truck’s release. Those will run buyers $112,595—not $135,000, not $165,000, but $112,595. Go aheas and breathe that sigh of relief, future Hummer owners.
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