Although the depths of the pandemic are in the rearview mirror, the delays and logistics issues caused by it are still a present issue for automakers, dealers, and new car buyers. In an effort to minimize delays, General Motors has decided to pay dealers to pick up their own vehicles.
Responses to the measure have been overwhelmingly positive, with dealers happy to have the opportunity to take some control over their supply shortages. Meanwhile, GM is happy to have more deliveries taken care of.
“One unit is one more spot on a rail [car], it’s one more spot on a truck. It does help the overall capacity,” Scott Bell, VP of Chevrolet, told Autonews. “Every one we move is one less that we’ve got to worry about finding a home for in the constrained logistics chain that we’re dealing with.”
In order to help them, GM is paying dealers who are willing to pick up their own vehicles. Rates depend on how far they have to go, and those who pick up directly from the factory are paid more than those who pick up from, say, a rail yard.
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If a dealer travels more than 800 miles (1,287 km) to a factory, they can receive as much as $1,050 for their trouble. However, for trips of less than 100 miles (161 km), the rate is just $225. Meanwhile, the fee for dealers who travel to a railroad-operated vehicle distribution center starts at just $100.
These prices aren’t too far off what GM would be paying anyway to deliver new vehicles with its own logistics partners. As a result, it says it has not been required to raise customer delivery fees as a result of the measure.
“We’ve had to get quite creative and really rethink how can we optimize this, and one of the things we realized is very powerful is our dealer network,” said Duncan Aldred, vice president of global Buick-GMC. “We’ve really mobilized that, and it’s going to be a big addition for us. It’ll be a real help in keeping that logistics flow going.”
Meanwhile, dealers say they’re happy to have inventory flowing through their doors again. Some are buying their own vehicle trailers, while others are filling vans with drivers to then drive the cars back to them. Some have even figured out that for the longest trips, flying the drivers out actually makes sense.
They say that customers are happy, even though it means getting a new car with a few more miles on the odometer than expected. Since this measure was introduced, GM estimates that more than 3,100 dealers have participated, and that as many 25,000 cars and trucks have been picked up by dealers.
Although everyone involved seems happy with the arrangement for now, Bell admits that this is a stopgap measure. He said that GM is still looking for longer-term solutions to fix their logistics issues.
