Where did this allocation process come from? Congressional mandate? Seems to make less sense to me than the tax code. Being a total naive rookie, I shop for a local dealer. Find one who seems OK, able to get a great price, they put the order in, but oh no, can't build a Victory Red car for me right now so the dealer uses his allocation to order stock. Since they aren't one of the "Big Boys", I'm stuck waiting for them to get another allocation. Why should any customer willing to make an order with any Chevy dealer be made to wait while the "Big Boys" fill their lots. I've seen one of our forum dealers advertise that they always have 100 Corvettes on their lot. Where is the sense in that? I had a salesman tell me that allocation is based on prior year sales. That they had to earn their allocation. How is the average dealer ever gonna earn a bigger allocation if the policy practically forces the buyer to go to the "Big Boys" to place an order? Can you more experienced sages of the Forum explain how this monopoly was created? Or rationalize it for me? Maybe I'm just venting because I have to wait, and I'm just dying to get a Victory Red C6!!!!!!!!!!!!!

 

It is the American Way=Golden Rule....them that has the gold rules.

 

You need to get your money back and go to one of the Golden Rule dealers.

 

During the last few years of the C4, Corvettes were not selling all that well. A few dealers stepped up to the plate and sold Corvettes for little or no profit. These dealers actually helped save the Corvette and without their efforts there might not have been a C5 in 1997.These dealers have been "rewarded" with the large allocation they are receiving now. Seems fair to me.

If a dealership now wants to increase their allocation, they must buy a car from another dealer and then this car will count towards their allocation in the future. There were plenty of 2004 Corvettes available and the dealers who have little allocation could have bought these cars and sold them. That would have required effort and little profit. It's much easier to sell a car with a built-in demand such as the current C6. It seems that your dealer understands the allocation system but he should have explained it better to you.

 

In the mid-90's, Chevrolet made it very clear how Corvette would be allocated once the C5 (and beyond) came out. All dealers were given a chance to get involved then, but many choose no to. Last year, when many 2004 C5 sat at the plant because of people waiting for theC6, many of these dealers were given the oppurtunity to increase their inventory and thus thier future allocation and again, many choose not to. It's easy for them to complain that they can't get the car when it's hot, but they didn't want to be involved when it was a slow market.

Dave

 

It's all about rewarding the dealer that sell Corvettes during the hard times. If it wasn't for these Big Boys making the hard sales over the years there wouldn't be a Corvette for any of us to buy.

 

May not be what you want to hear but it's the truth. GM is a business not a service organization. They do what they can to maximize their profit and so do dealers. You negotiate for $1k below MSRP and some bozo comes in the next day willing to pay $2K over MSRP - guess who the next allocation is going to? Surprise - Surprise

 

Your points are all well taken. As a newbie, I never considered that there were ever down periods for Corvettes. At least it sounds a little more fair to me now! Thanks for the education. I'll tuck my tail between my legs and shut up now....

 

That's option "A." A fellow in my local club ordered a new 2001 model from a dealer and got a great price on the car. But he waited 10 months before the dealer finally told him they had "zero" allocation for Corvettes and it didn't look like that was going to change.

Option "B" would be to cancel your order, demand your deposit back and then re-order with one of the Forum's supporting dealers. I'm sure any of them would have the allocation to give you a speedy delivery -- some more than others.

 

My dealer warned me they couldn't guarantee when the order would go in. So I knew I was taking a bit of a chance. But they were accepting a GMID order (about 12% below MSRP), so I was willing to gamble. And they did place the order for me. Just got nixed because of the constraint on Victory Red. They offered to order me any other color, so I can't blame the dealer for this one.

 

Dave,
We all appreciate what you have done for us plus I would and do recommend you to anyone buying a Vette, but I disagree with you on this one. Obviously you make a good point and there should be some reward for dealers that stuck by the Vette in both bad and good times, BUT this car is, after all, built for the customer and that should be GM's top priority. This whole allocation thing has gone too far. Why should one dealer in my area be getting all the cars he can, so that his showroom has 4 to 6 unsold Vettes at all times with a $5000- markup, while a customer at another dealer a few miles away is being told he has to wait another 2 months for his factory order to even be accepted? There is something wrong with this. Is it the customer be damned and the only thing that counts is rewards to the dealer that ordered a lot of cars last year playing the dealer game to get his C6 allocations up? Sorry, this just isn't right. Someone at GM isn't thinking this out properly. Maybe dealers with customer orders should get some type of priority after the guys with the big allocations have 2 (4, 6, 8,...??) unsold cars on their floors. There has to be a better way than this mess with customers getting upset and orders being cancelled, just to reward dealers for past performance.

 

Do dealers have sepearte allocations for coupes and convertibles, or if he has an allocation he can order whatever he likes?

The whole system seems rather non-customer focussed, since a naive buyer, can place an order (and pay a deposit) to a dealer, and not find out for a very long time that the dealer in fact can't order the vehicle for him since he has no allocation?

 

You wait regardless...larger dealers just have an order waiting for you.

 

You make a very good point. Let me give you a little more info that the dealer with cars sitting on the floor with a 5k bump sticker on them don't understand. If you get a car and delivery it quickly, you could earn a replacement later in the year when allocation loosens up. That's called Turn and Earn.

Secondly, lets look at this from another point of view. Lets say you had a store that sold 8 kinds of widgets. Each year, the representative from the widget factory sits down with you to plan the next year. If there is one particualr type of widget that you only sold an average of 4 for the last 3 years, the rep is only going to want to give you 4 or 5. You can ask for 20, but his statistics on your store say the store can only sell 5 and if he gave you more than that, they would sit on the shelf costing you and the factory money. He may give you a chance to start building and give you 7 to see how you do. In the mean time, he has another store that sells 800 of that widget, he knows that they will move off that shelf quickly so why would he take widgets away from that store to put in your store when we know that there is a finite amount of that widget that can be produced next year. For every extra you get, it has to come from someone else.

Lastly, let me tell you how some other automakers work. We have a Bentley franchise here. The Continental GT is the hottest High End car out today. We have some in stock and are getting calls from all over the country to buy them. The problem is that Bentley gives us a list of zip codes we can sell to and no one else. So even if I have 5 and your local dealer has no or mayber one for 20,000 over sticker, I can't sell you one because you are not in my market.

Just some extra info for the debate. Also, to answer someone elses question, you do get a set amount of coupes and convertibles. You can't take a coupe allocation and change it into a convertible.

Dave

 

To GM, like any other business, the customer is not the top priority, making money is. A system that helps GM move the product, but is not necessarily the greatest for the customer, wins.

 

Now that has got to be pushing the limits of being legal. What happened to dealers being "independent businesses" and the manufacturers cannot dictate such issues? Very strange.

I agree with some of the great posts about how GM's system is designed to reward the dealers - not satisfy the customers. If Bently can dictate it's policy you state above, then why the hell can't GM dicated that dealers not sell over sticker? These are the dealers that are making the customers so upset with the allocation system.

Unfortunately, the only two large Corvette dealers in Houston (or within 250 miles) are both owned by Heard (the other being Landmark). They should have been de-franchised years ago by GM, but GM is more concerned with volume than with customer satisfaction. They are truly the biggest ****** I've ever seen in the car business (and I have plenty of stories to back this up).

 

This isn't the panacea that you may think it is, either... For a whorish
real-world example, let's look at the way the world works in the land of the Italian Prancing Horse...

Ferrari of North America actively discourages its dealer network from charging over sticker for a new car. Sounds great in principle, right? Call up your local friendly F-car dealer, place an order, and a few weeks later, walk in with a fat check and leave with a heavenly Challenge Stradale with a Tubi exhaust...

We 'Vette guys complain about options being on constraint. But in some ways, we have it easy. The General will try to fulfill all the orders he gets for a given model year. If you can find a dealer with allocation, you should be able to take delivery in the MY that you order in.

Now think about Ferrari. For various reasons, they limit production of their cars. Next year's entire run of 430s is about 1500, and if you believe Forza magazine, it sold out two years before the 430 was even publicly announced. (Crazy, I know). So what happens to Joe-Regular-New Money Millionaire, who walks into Ferrari of Beverly Hills, thinking that because he patented widget #9, he can now buy an F-car at sticker, because FoNA is looking out for him with their cool customer-oriented sales policy?

Joe: "Hello, I'd like to place a build order for an F430."
Salesguy: "I'm sorry, but no more build slots are being accepted for this year. Would you like to be placed on a waiting list for next year?"
Joe (shaking his head a bit sadly): "Ok, sure, I guess." He then notices a stealthy Nero F430 to the side of the showroom. "Well, what about this one? Can I buy this one?"
Salesguy: "Sure you can."
Joe: "Why is it $50K over sticker? I thought you weren't allowed to sell new cars over sticker."
Salesguy: "This one's used. See? It has 672 miles on it."

Poor Joe goes home to think about his day, not realizing until he logs onto a Ferrari forum that the salesman was trying to sell him a "flipper."

Flipper:
1. A talking dolphin.
2. A device used to play pinball.
3. A new Ferrari sold to a "friend of the dealership," which is titled, driven a few hundred miles to become legally used, and then sold back to the dealership for a profit (to the friend). The subsequent "used" Ferrari can then be priced at whatever the dealership thinks the market will bear.

In the above case, $50K above sticker.

I'm sure you can see where I'm going with this. Let's say GM institutes the same "no-more-than-sticker" policy for their dealership network. People buy 'Vettes at sticker and everyone is happy (except for the rough and tumble negotiators on the forum here that always seem to manage $3K off MSRP). Then news of the first constraint parameters come wafting up from the factory floor. Let's say that 'Verts have now been placed on constraint (as if that would ever happen ). The few 'Verts that have been built get shipped to their respective dealers. It's the middle of summer, and dealers aren't fools. What premium might a deep-pocketed, impatient buyer pay for a C6 'Vert in the summer? Time to start flipping!

By the way, Ferrari SpA (the European parent) knows all about this. To avoid this kind of market speculation on the F50 and the mighty Enzo, instead of being able to purchase the car outright, you essentially "leased" the car for two years, basically to prove that you weren't just buying the prancing horse because you had Charlie Sheen-Wall Street scruples in your blood. After the time was up, you could either purchase the car, or sell it back to the dealer (another neat trick, the way that some F-dealers demand "right of first refusal" when they sell to you).

Well, thanks for letting me ramble. This took enough time so that I can now leave work :-).

 

Dave,
I disagree with your widget example because here I am talking about satisfying SOLD orders. So GM takes no risk unlike that widget dealer.

My whole point is that there are customers that have Corvette dealers nearby who went to those dealers, put down deposits, and then have been forced to wait months for their orders to be kindly accepted by the same company that that dealer represents, while at the same time Chevrolet delivers UNSOLD cars to the dealer down the block who then can try to rip off customers because his showroom is full. What kind of way is that to do business? Like I said in my first posting, it has at least the appearance of screwing the customer just to award the dealer who sold most last year. My whole point is that there should be some type of compromise which gives the dealer some reward but also takes into account the customers who form the loyal Corvette base.
As far as Bentley is concerned - I question the legality of their practice but, in any event, 2 wrongs don't make a right.

 

I agree with you on the widget example. How can a dealer sell a Corvette if GM won't give him any to sell. I buy Pepperidge Farms Fat Free Croutons. I used to buy them from the supermarket(Wal Mart Supercenter) I regularly shop, but 90% of the time they were sold out so I had to go to another supermarket and pay more. Then Wal Mart quit carring them completely. I asked them why, and they said they weren't selling enough of them. I replied "If you had them in stock you would sell more then never having them in stock". Same for a car dealer. If a dealer with a small allocation never has a C6 in stock (or can't order one) because GM won't give them any, then his customers have to go to the dealers with the large allocation. I submit that this gives GM the impression that the small dealer dosen't have the customers and the larger dealer does, when in effect the large dealer gets the business because he has the market locked up, not because he has the customers but because he has the cars.

 

It's called "franchising." If you want to have the ability to advertise yourself as a Chevrolet or Bentley dealer, you have to agree to the terms of the owner of the name.

If you don't like the terms, don't sell that brand.

Bentley can afford to dictate strict rules because they are a low volume / high demand marque.

GM can't. What they can control is how many cars they give you. You play by the rules and you get more cars.

Understand that for 90% of the car models out there, allocation isn't an issue. Dealers have a hard enough time selling the cars they do get. Go shop say a Malibu. I'm sure you can find your exact car sitting on the lot at a half dozen local dealers. The Corvette is an exception. So is Bentley.

Stephen