Profitability remains the top priority for Buick and GMC dealers in 2019, according to chairman of the brands' national dealer council.
Todd Ingersoll, CEO of Ingersoll Automotive, said everything the council did during his first year as chairman was meant to increase the bottom lines for both brands.
Those efforts included streamlining factory programs such as Essential Brand Elements and Standards For Excellence to more clearly set goals to stabilize and grow profitability for the brands.
Ingersoll, 48, 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.
He spoke with Staff Reporter Michael Wayland about profitability, the next-generation GMC Sierra and streamlined programs. Here are edited excerpts.
Q: How was 2018 for Buick-GMC dealers?
A: It's been a challenge, I think, for the industry, as it's plateaued. Everybody is certainly swinging for the fences and trying to get their portion of the pie, if you will. We're no different or immune to that. We're excited about the prospects of the new pickup truck, which is launching now. That's going to be a huge play for Buick-GMC.
Are the full-size and heavy-duty Sierra pickups the most important upcoming products for Buick-GMC dealers?
Yes, clearly the T1 launch is mission-critical for GMC and Buick dealers across the country. It's the heart and soul of the franchise.
What are your thoughts on the redesigned 2019 GMC Sierra 1500?
It's hard not to be excited about it. I believe that the new T1 designs that they've put out are the finest pickup trucks human hands have ever created. It is a terrific execution of that platform. With our unique tailgate that's available at GMC, with six different functions and one of them creates a step where you can step into the back of the bed, I think is amazing. There're other innovations that are in the truck as well. It's one of the largest beds available, so it should do really well. They just knocked it out of the park. It doesn't matter the trim level. It's just magnificently executed.
How was your first year as chairman of the Buick-GMC National Dealer Council?
First of all, any time you can lead a council like Buick-GMC it's an absolute privilege and honor to do so. And to work with what I think are some of the best dealers in the country, who also are on the council with me, and represent the entire dealer body, it's been very rewarding from that perspective.
What are your top priorities as chairman in 2019?
Profitability still remains our No. 1 priority, and one of the things that we've worked on is trying to simplify some of the programs we have within General Motors. Different programs that have a lot of requirements to obtain certain performance levels have now been streamlined. We've gotten a lot done in that area and worked through a lot of the different issues we had. We really cleared some substantial hurdles on that front.
New-car margins are getting squeezed throughout the industry. What are Buick-GMC dealerships doing to help profitability and reduce expenses?
Each dealer makes their own business decisions on what they feel is best to streamline their operations. One of the things about having a healthy, brand-new, state-of-the-art pickup truck is typically the margins on those are much healthier than they are in some of the others in different manufacturers/lineups.
But, in general, there's margin compression that is occurring everywhere. It causes you, I think, to be more efficient in every part of your operation. It highlights areas you can improve upon such as service retention, that's a big one, and growing your service business. We've seen some nice service increases this year in my operations. Again, I'm only speaking for myself in this particular instance, but we've seen substantial service growth in the past year.
Are aftermarket and accessory sales also picking up?
The aftermarket and accessory business is an area of profit that I don't want to say was ignored, but a vast majority of folks did not concentrate on it. That's certainly another revenue stream to chase to increase revenue. But look, none of us are pleased with the compression and what that means. It's very difficult to make it all work. There's a lot of requirements, there's a lot of different objectives you need to hit and to try and streamline those to make it so that they are obtainable and to create a win-win for GM and the dealers.
One of the things that we worked on was SFE, Standards For Excellence, and coming up with a streamlined objective for that. Instead of working off an average of an individual store, they're figuring out what your percentage of national sales has been over the last four years. That helps to eliminate regional issues. Things like earthquakes, hurricanes and snowstorms. It smooths out any of those anomalies that are out there. You start seeing some pretty consistent numbers as far as how stores perform. It appears to be bearing out that it's a much fairer way to set the levels for SFE.
Last year you mentioned expanding GM's Essential Brand Elements program over multiple years. Were you successful in doing so?
We were successful in tweaking and simplifying the programs for this year. In lieu of not necessarily saying these were going to be a three- or four-year commitment to do these, we've now streamlined them. The people who are able to obtain their different payout levels is going to be much greater than it was last year.
Moving forward, would you like to see any additional vehicles for Buick-GMC?
I don't know anybody that would ever say "no" to that question. The answer is "yes." I trust that our partners on the factory side are doing just that and exploiting everything they can in filling some of our shortfalls.
And looking to the future, whether it's electrification or all the other exciting technologies that will come down the road, I'm sure Buick and GMC will be in the hunt for those products.
Is Buick-GMC adequately advising its dealers on how to prepare for such changes as new mobility services, the advancement of autonomous vehicles and more vehicle electrification?
We don't know anything about new mobility or subscription efforts. We don't know what that looks like right now. That technology is probably still pretty far down the road. You get into Level 5 autonomous and I don't think anybody has that nailed.
What segments would you like to see Buick-GMC competing in more?
If there is something within GMC that could be sub-Terrain, along those lines? We have so much but that would be one area that would be nice to have.
In Buick, certainly with our adjustment that we're making and our strategy for crossovers, they've been very successful in what we have done and I think there will be exciting new entries.
How was the Buick Regal launch in 2018?
The Regal has not been immune to where the industry has gone when it comes to sedan purchasing. It has probably been felt to a greater extent, given that its nameplate was not in the market for some time. When you see the likes of Honda Accords and Toyota Camrys and their sales down, it only would make sense that a newer arrival in the name Buick Regal would struggle as well. I don't think it's an unusual situation that we've experienced there.
GM hasn't put much, if any, incentives behind leasing the vehicle. Would that have helped?
There aren't endless resources where they can put their money to drive markets. I think we've seen, from the top-down, that they're going to concentrate on where the consumers are and that is in crossovers and SUVS.
What's the response been to GM ending production of the Buick LaCrosse for North America on March 1?
It's such a beautifully executed car and, unfortunately, it's fallen victim to the taste that people have and their choice for driving vehicles.
Would you like to see the LaCrosse be replaced with another sedan or a crossover?
Everybody would like to have the crystal ball to understand exactly where consumer preferences are going and it's hard to know, but we can definitely see it's a clear shift away from sedans and to crossovers and utility vehicles. The preference would want to be to fish where the fish are, and I think that's what we've got to concentrate on both on the retail and factory side.
What's been the response to the expansion of Buick's new upscale Avenir subbrand?
Almost every single month, Avenir is growing steadily in penetration. Quite frankly, if you probably compare where Denali was at the beginning of its lifecycle, my sense is Avenir is on par or maybe even ahead of where Denali was when it was launched decades ago. The Avenir nameplate has exceeded our expectations.
Would you like to see it expand across Buick's lineup like Denali has for GMC?
Yeah. Most folks, when they're in these like-luxury brands, want the option of saying, "I have the one that has all of the features and some of the extra amenities that other folks can't have." And that's what Avenir stands for in Buick and what Denali stands for with GMC.
How are rising interest rates affecting Buick-GMC dealerships? Are Buick-GMC and GM Financial doing anything to help mitigate challenges created by higher rates?
Rising interest rates obviously have an affect on the inventory holding cost. General Motors just increased support around that across the board. It makes most dealers take a close hard look at their stocking levels and try to find that sweet spot of enough vehicles so they have a nice selection but you can increase the turn so that it doesn't become a drag on your financial results. It makes you have to run it a little bit leaner.
Is vehicle affordability a concern? What is Buick-GMC doing to address these concerns?
I think vehicle affordability is a concern for everybody in the industry. We have to build cars that make money and we have to be able to make money when we sell them. And we have to hit the right sweet spot when it comes to the consumer being able to get the amenities they want at a price they can afford. I think, working GMF, coming up with special finance rates and also looking at leasing, all become different levers that different consumers can pull. That helps to find the right avenue that guests can take in order to afford the vehicles of their dreams.
Does Buick-GMC use stair-step bonus programs? What do dealers think of those programs?
SFE is probably the closest thing we have to a stair-step program and it's not a true stair-step program. It would be what some folks in the industry might call that, we don't. It's Standards For Excellence. Obviously, the tweaks we made this year we think help level the playing field for obtainment, so that more people can obtain their payout at a higher payout rate than they were in the past. That's the goal. More people, more money.