Update: GM has confirmed the letter’s authenticity, which was sent last week. A GM spokesperson reiterated that the company wants customers to have a positive sales experience, and that the majority of dealers know this.
It’s not a good time to buy a new car. Constrained supply chains and parts shortages have driven up prices and limited inventories. Some dealers are taking advantage of the situation by adding huge price markups or engaging in other unsavory sales practices. General Motors has some important launches on the horizon – Corvette Z06, Silverado EV, Cadillac Lyriq, and the company is attempting to limit such tactics ahead of their launches.
Corvette Action Center first published a letter from Steve Carlisle, GM’s North American president, reminding the dealership team of their obligations to sell GM vehicles. The letter says it found a “small number of dealers” engaging in “practices that do not support a positive sales experience for our customers.” Motor1.com has contacted GM to confirm the letter’s authenticity and other details. We will update this story when we hear back.
Gallery: 2024 Chevrolet Silverado EV
GM notes that it has learned that some dealers have asked for reservation deposits that exceed GM’s program rules. Others have asked customers to pay exorbitant markups over the vehicle’s MSRP (Manufacturer Suggested Retail Price). The letter goes on to remind dealers of their obligation in selling GM vehicles, pulling straight from the Dealer Sales and Service Agreement lines like, “Dealers agree to effectively, ethically, and lawfully sell and promote the purchase, lease, and use of Products [sic] by consumers.”
The letter concludes with GM noting that it will take action if it learns of “any unethical sales practices or brokering activities.” That action includes GM redirecting a dealer’s vehicle allocation or “other recourse,” which sounds ominous. Ford has made similar threats about vehicle allocation to its dealers as the Blue Oval also sees a minority of dealers taking advantage of the current market situation.
Price markups and other unfriendly practices are an industry issue that will likely remain a bother for the coming months, especially for highly desired models like the Corvette Z06 and others. Read the full letter at Corvette Action Center.