As redesigned Buick Envisions trickle onto dealership lots and retailers begin preparing their facilities for the electric GMC Hummer, Buick-GMC dealers are hungry for more inventory.
“Demand is outstripping supply, which is a good and bad thing. It’s a double-edged sword,” Todd Ingersoll, chairman of the Buick-GMC National Dealer Council and CEO of Ingersoll Automotive. “We really need more vehicles, and they’re very much aware of that.”
Buick and GMC pickups, crossovers and SUVs are selling as soon as they reach dealers’ lots and often before they arrive, said Ingersoll, 49. Ingersoll owns three dealerships selling General Motors brands — Ingersoll Auto of Pawling (Chevrolet-Cadillac) in New York and Ingersoll Auto of Danbury (Buick-GMC-Chevrolet-Cadillac) and Buick-GMC of Watertown, both in Connecticut.
“They are doing everything they can to maximize every single vehicle that they can in the build schedule,” he said. “We just have to crawl our way out of this, and we will figure it out.”
Thorough communication from the Buick-GMC leadership team throughout the pandemic has helped, Ingersoll added. The sense of partnership will also poise the brand and its dealers for success when it begins selling electric vehicles, he said.
Ingersoll spoke with Staff Reporter Hannah Lutz about dealership profitability, digital retail and Buick and GMC’s evolving portfolios. Here are edited excerpts.
Q: How has Buick-GMC helped dealerships navigate the changes brought about by the coronavirus pandemic?
A: The amount of communication that came from Buick-GMC was unsurpassed from any other time that we’ve ever had. The council met — at the beginning of it — daily. It spread out from there as we kind of got things contained. The real trick to navigating your way through a storm like this is communication.
We saw Duncan Aldred (vice president of global Buick-GMC) start Duncan Direct, which was these two- or three-minute videos going out to the network, sometimes weekly, sometimes biweekly, keeping that communication line open. The better the communication, the better the results ended up being. They had firsthand frontline information flowing back to them. And accordingly, they could make business decisions based on what we were seeing out on the front line.
It was also important they put together a plan to help dealerships adjust immediately to taking cleaning precautions so that there was a whole series of things that you needed to do to become certified as a clean dealer. And they were on that. It was a really good example of teamwork.
How did GM’s incentive programs early on in the pandemic drive sales?
Right out of the gate, GM came out on the pickup truck and a lot of other stuff, but particularly the pickup truck for 0 percent interest for 84-month financing, working in collaboration with GM Financial, which helped stabilize sales but grow them. The programs helped to lead the industry, quite frankly, out of what could have been even a darker time.
What is Buick-GMC doing to direct dealers on digital retailing?
This year, more than ever before and specifically in certain markets, online shopping has become a more important factor. And it really comes down to certain markets. GM has poured a lot of resources, time and energy into tweaking Shop-Click-Drive so that it really can be a beginning-to-end solution for somebody who wants to buy the car just strictly online and not have any interactions in the store. Interestingly enough, speaking for myself, we have seen very few people who don’t want to take a test drive in the car that they’re considering buying, at least so far.
Is Buick-GMC incentivizing Shop-Click-Drive and other digital retail tools?
No. It’s a tool in the backpack to climb the mountain. They have made sure we have the tool. Most dealers would say, it’s a solid tool or we have elected to go with a third-party vendor doing the same thing.
Is Buick-GMC de-emphasizing physical facility requirements in favor of elevating digital ones?
No. The Buick and GMC brands are premium brands, and their retail establishments should mirror what the brands stand for.
And they do. We’ve gone through one of the largest renovations in history of the dealerships not that long ago. So the stores are in really good shape right now and there is no pressure to make changes to it.
How are Buick-GMC dealerships’ fixed operations?
Fixed operations has been a challenge. We were just coming off of the strike and things were just stabilizing and then we went right into COVID. This is another example where communication has been very good. We’ve tried to keep customer care and aftersales abreast as to what we’re seeing on the ground.
And for the most part now, we’ve got the kinks worked out. The parts have free flow, and things are moving along nicely. The challenge is at any given time, you could have one supplier who is stricken with COVID, and you might be down for a couple of weeks. But it’s turned around significantly.
Are inventory levels improving?
At least right now, one of the benefits is there’s cars in the pipeline. So as we ramp back up after the shutdown for the holidays, you now have cars at least in the pipeline. Before you had to fill the pipeline for transportation before they could even hit the dealership. We would anticipate it improving and getting better throughout the year as long as there’s no disruption due to the pandemic.
Could lower inventory become a long-term retail model?
There’s a balance. Everybody wants to be one short, but you don’t want to give up market share. And so figuring that out is — there’s a lot of experts at the manufacturing side trying to do just that. Buick-GMC is very pleased with the health of its dealer network and recognizes that it’s important to have a healthy network. There were some great lessons learned in this pandemic, which hopefully we can carry forward.
Are Buick-GMC dealers using VIN View?
It’s available to the entire network. A very high percentage of dealers have adopted it and it’s fantastic. It really allows you to be able to work with a guest when you’re discussing where a car is in its build and transportation to the store and give them an idea when it will arrive. We’re selling vehicles as they’re on their way here.
How are Buick-GMC dealerships’ profitability levels?
At this point during the pandemic, Buick and GMC profitability for the dealerships as a whole exceeded all of our goals. And we set some pretty lofty ones. But the goals that we set for things like return on sale, quite frankly, we smashed all the records. And it’s great to see that the network not only survived but came out of this and in a way that you can be proud.
What drove profits?
People made adjustments to expenses. Any time you drive down expenses, that’s one portion of equation to drive profitability. The second thing is the mix of vehicles that we are selling throughout the year. Because we build the best pickup trucks and best sport-utility vehicles in the market, that resonated with the public and they took off. It led to sales increasing and really allowed — with the decrease in expenses — some success with profitability.
When will electric-vehicle facility upgrades begin for the GMC Hummer and other EVs? What will they entail?
They have been really good about walking us through that. There’s kind of a cadence that needs to occur. You’ll have a third-party vendor who will help look at what your current setup is and see if you meet the current requirements or what changes need to occur. I would anticipate that over this year, everybody will go through that process.
What was dealers’ impression of the Hummer/EV reservation system that starts with GM, rather than the dealer?
There was a lot of angst about that early on. But quite frankly, going back to communication, the flow of communication from Duncan and his leadership team and right down to the regional levels allowed everybody to understand what the goal was. And the fastest way was to say, “We’re doing this national campaign. We put it out there and we’re going to direct them right toward you.” We’ve seen that executed successfully at other brands, including Ford and obviously other electric car companies. It shows that it worked very well.
How is the redesigned Yukon selling?
They are all sold. They are fantastic. That’s a great example of GM’s not only design prowess but their engineering prowess and them absolutely taking complete ownership of a segment and a market. They are the best of the best when it comes to large SUVs.
What do Denali and AT4 mean to GMC?
I think they are great examples of engineering and design prowess and what it can do to sales. It’s kind of like, you take something that is fantastic and you knock it out of the park. And that’s why we’ve seen such acceptance in the market for those products. The consumers just love the look. They love the engineering in them.
How do you think the Encore GX became Buick’s top seller so quickly?
It’s a great design. It stands on the strong, steady shoulders of the original Encore, but kicks it up a notch and addresses some of the areas that they could improve upon in the Encore and did just that. I think the look is fresh. I think it appeals to a broad spectrum of people. Putting things like automatic liftgates in the vehicle are examples of Buick and GMC’s leadership, listening to the dealers and saying, “Look, there’s demand for this, you need to build that in.” And they did.
Are dealers directing Buick Encore buyers to the Encore GX?
Speaking only for myself, not the whole network, what we’ve seen is the original Encore volume coming down as inventory levels of it fall. It’s really just had a broad appeal for everybody from new buyers to empty nesters, to you name it. It crosses generations, which means you’ve really nailed the design with the vehicle.
What’s missing from the Buick lineup?
We’re excited about the new Envision, because that’s going to round out the portfolio to really draw a line in the sand and say, “This is what great design and great engineering looks like.” The new Envision is a perfect example that I believe will give lift like the GX has done for the entire Buick brand.
What type of Buick EVs would dealers like to see?
We want the vehicles that the consumers want to buy, and Buick-GMC is doing a lot of research and homework to figure that out. And we trust that our partners at GM will do just that.
How has communication been with leadership this year?
It was unparalleled. They absolutely knocked it out of the park when it came to communication. In business and even in life, the more and more accurately and the more fluidly you communicate, the better off everybody is. And there was no greater example than what we saw from the leadership at Buick-GMC.
How are incentive levels?
Based on our current inventories and the current turn rate, I would say they have got it dialed in pretty good. As a dealer, we always want more incentives, but we are selling everything as it’s coming in. I think they are watching that just as carefully as we do.
Is Buick-GMC doing enough to promote certified pre-owned sales?
Much of our energy in the last nine to 10 months has been directed around new vehicles and the launch of both the Envision and Hummer. I think there is some work happening behind the scenes on CPO, so stay tuned.
Is Buick-GMC adequately advising its dealers on how to prepare for new mobility services and autonomous vehicles?
Some of this stuff is further out on the horizon than others. The communication that we just went through in the pandemic, if that’s any indication of what will be needed going forward, we know not only are they capable of it, but they they’ll do a great job at it. I would trust that they’ll communicate very effectively as we navigate our way through that portion of change in our industry.
Is Buick-GMC doing enough to prepare dealers for EVs specifically?
I think that’s one of those things where it’s still a little further out. We’ve seen what that is and how it will play out for the network, and it will be very aggressive in the forthcoming months.