News / Economy

Dealers Say GM Customer Anxiety Rising, Sales May Take Hit

A group of Chevrolet Camaro cars for sale is pictured at a car dealership in Los Angeles, California, April 1, 2014.
A group of Chevrolet Camaro cars for sale is pictured at a car dealership in Los Angeles, California, April 1, 2014.
Reuters
— An ignition switch defect linked to deadly crashes and mounting recalls are raising anxiety in General Motors Co. showrooms, according to dealers who increasingly are fielding calls from customers concerned about the safety of GM cars.
 
The Ancira Auto Group in San Antonio, Texas, expected a banner March after a strong February, but it came up 28 vehicles short of its goal of selling 200 cars and trucks, Vice President April Ancira said in an email.
 
GM Chief Executive Mary Barra on Wednesday endured a withering attack at a U.S. Senate hearing that opened with accusations that the company fostered “a culture of cover-up”, and Ancira said the bad news centered on the ignition switch issue contributed to her group's sales miss.
 
“It will take some time for the brand to gain back the customers it lost,” she said. “But I have got to believe that General Motors will use this opportunity to really focus on improving the safety of their product.”
 
Interviews with more than 20 U.S. GM dealerships this week revealed concerns that sales would be pressured, even in a recovering auto market. Dealers also made clear there's an escalating number of jittery current GM owners, and demands for repairs threaten to clog some repair facilities.
 
“They are calling for information. People are a little confused about what they need to do. There are a lot of these cars out there,” said Al Belford, fixed operations director at Ed Bozarth Chevrolet in Las Vegas, which has been getting about 50 customer calls a day for the last three weeks.
 
Jacqueline Aguilar, service coordinator at Brickell Buick GMC in Miami, said the dealership handles was getting up to 40 calls a day between 2 p.m. and 6 p.m.
 
Holland, Michigan's DeNooyer Chevrolet has been getting 10-15 calls per day, sales manager Dominique DeNooyer told local television, adding that the dealership was finding the “influx” of people challenging.
 
Since February, GM has recalled 2.6 million vehicles due to concerns about ignition switches that unexpectedly turn off engines during operation and leave airbags, power steering and power brakes inoperable. And so far this year, GM has recalled a total of nearly seven million vehicles, or about the same number recalled in the previous four years combined.

Toyota's recall of 2010
 
In January 2010, Toyota Motor Corp recalled nearly 2.6 million vehicles in the United States and Canada to fix sticky accelerator pedals. The recall and the controversy leading up to the decision punished sales.
 
Less than two weeks after the recall, Toyota reported a 16 percent drop in January 2010 U.S. sales. Sales fell again in February before rebounding in March. Still, the automaker's U.S. market share hasn't regained its peak of 17 percent, set in 2009.
 
In contrast, GM's numbers improved in March, the month after the first stages of the recall were announced. Dealers delivered 256,047 vehicles in the United States in March, fueling a 4 percent increase in total sales from year-ago levels. Retail sales were up 7 percent and GM said it gained retail market share.
 
Overall, the auto market is in recovery mode, and a lot of dealership executives, are staying optimistic, including Brad Sowers, owner of Jim Butler Chevrolet in the St. Louis suburb of Fenton.
 
“I'm still in the mode that it's going to be a good year for us and the marketplace has cars that are 11 or 12 years old and rates are really low,” Sowers said.
 
“Our sales have been average,” said James Mardenli, general sales manager at Cerrone Chevrolet Buick & GMC Truck dealership in South Attleboro, Massachusetts. “April should be a good month in terms of sales because April, May, and June are usually the months where the most cars are bought.”
 
But Morgan Stanley analyst Adam Jonas wrote in a research note that his uncle, a car dealer in Canton, Ohio, was concerned.
 
“I think April's gonna hit rock bottom for us. We know we'll get through this, but are just hoping this issue passes as soon as possible,” Jonas quoted his uncle as saying. Jonas didn't name his uncle or respond immediately to a call about the discussion.
 
At GM dealerships near the major U.S. cities of Boston, Cleveland, Los Angeles, Miami, and San Antonio, managers agreed they were spending a lot more time allaying customer concerns.
 
They reported offering more rental cars, agreeing to more trade-ins and telling customers to lighten their key chains.
 
Several dealership executives conceded the bad news is distracting their teams from making their sales pitch in the showroom.
 
Some customers, however, don't want to wait weeks for their cars to be repaired. GM has offered some incentives for trade-ins and dealers say the offer is being taken up.
 
Andy Sweis, general manager at Jennings Chevrolet in the north Chicago suburb of Glenview, Illinois, said the dealership has taken in about a half a dozen Chevy Cobalts for trade-in since the recall

You May Like

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.