Should they be worried?
The times are changing and the traditional auto dealership model is already vanishing. This may have started with Tesla's online sales method but it's been thrust into the mainstream with legacy brands due to the pandemic. Consumers have clearly shown they prefer shopping at home without the need to even set foot in a dealership. In the case of the new and all-electric 2022 GMC Hummer truck and 2024 Hummer SUV, buyers can pretty much dodge the dealer entirely.
Needless to say, dealers are not happy about that, as we reported last fall. GMC has not only chosen to sell these expensive models through an online-only reservation system but plans to keep this method in place for at least two years. How will this affect GMC dealers in the future? The Detroit Free Press confirmed with GMC's vice president of marketing, Phil Brook, there'll be minimal dealer involvement for these specific vehicles.
Buyers will instead work directly with General Motors to arrange their purchases. The vehicles will still (eventually) be shipped to dealers for delivery. Moreover, Brook said the GMC retail shopping experience will "evolve" as more EVs are launched, but there's still a critical dealership role. "This vehicle allows us to take a different approach," he said. "The market is evolving and changing and we're changing, but we are working through the dealers. We see our dealers as a huge competitive advantage for us."
Going forward, GMC dealers, like those of other mainstream brands, could largely serve as service centers rather than conducting traditional sales and financing.
Things like recalls, technical and mechanical issues, charging stations, and test drives will still be handled by dealers, but make no mistake about it: legacy brands' dealerships must adapt to the new reality. Many have already begun doing so. Out of the 1,800 GMC dealers in the US, 1,200 have signed up to help sell the new Hummers. This means they must invest in a charging infrastructure and related tools.
Brooks declined to say how much each dealer must invest, but their Cadillac store counterparts have already been asked to fork over $200,000 to $250,000 in order to sell future EVs, like the 2023 Lyriq. Dealers who opted out have since been bought by Cadillac corporate. GMC has no intention of following that model but it still must convince dealers the infrastructure investments are worthwhile.