GM Is Paying Dealers Thousands To Pick Up Inventory Themselves

GM Is Paying Dealers Thousands To Pick Up Inventory Themselves

General Motors has a new plan for getting dealers their inventory: Come pick it up yourselves. Thousands of retailers have reportedly been frustrated by logistical bottlenecks and slow-moving new vehicle shipments from factories, so now GM is paying dealers up to $1,050 for each vehicle they pick up from four of its most important assembly lines. Automotive News reports that over 3,100 retailers have already taken the automaker up on the offer this year by picking up 25,000 cars and trucks.

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The outlet says that it isn’t just dealerships that happen to be near factories, either. Some of them have teams regularly driving all the way from Ohio to Texas for SUVs, or from New York to Missouri for pickups, according to the outlet. This move is apparently already helping GM’s books. Scott Bell, a VP at Chevrolet, tells the outlet he thinks the extra volume is beginning to show up in the brand’s sales.

AutoNews says supply chain issues have put a strain on inventory across the automotive landscape for several years, and while a lot of it is getting better, there are still issues with trucking and rail. Because of that, GM has had to find creative ways around logistical obstacles like buying its own fleet of trucks and adding extra capacity through third-party carriers to import the South Korea-made Chevy Trax on container ships rather than traditional vehicle cargo ships.

GM reportedly began encouraging more and more dealers to do self-pickup in June by upping the amount of money they’d be given after a discussion between its logistics team and Chevy’s national dealer council.

Here’s the breakdown from Automotive News:

GM previously offered up to $425 per vehicle to offset dealerships’ trips to plants beyond 400 miles, Bell said. It has increased that to as much as $1,050 for traveling more than 800 miles to plants in Arlington, Texas; Wentzville, Mo.; Fort Wayne, Ind.; and Oshawa, Ont. Compensation starts at $225 for trips of up to 100 miles.

Payouts are lower for getting vehicles from other locations: Starting at $100 from a railroad-operated vehicle distribution center up to 100 miles away or $200 for a trip of that same distance to a different GM plant.

Jalopnik reached out to General Motors about this story, asking if GM will be discounting destination charges for customers. The spokesperson for the automaker gave us this statement:

This program was developed with the sole goal of alleviating shipping/rail capacity shortages, meaning, this program addresses long wait times so we can get vehicles to the customer as soon as possible. We are incurring added, not less, logistical costs overall to alleviate these logistics capacity shortage concerns by finding and implementing new solutions like this dealer pickup program. Here are some other things we are doing: shifting more volume to trucking providers, custom-configured sea containers and railcars have become more costly too. But to answer your question, no – we are not passing on these added costs to the customer by modifying destination charges.

We have, and are continuing to take, mitigating actions with alternative logistics solutions (like the ones I mentioned above) to ease the back-up, but the congestion may persist for some time. These are a short-term solution to get vehicles to customers faster. We are thankful for the partnership with our dealers to find solutions to be able to do so.

Auto News says that of the vehicles picked up by dealerships this year, about 60 percent were Chevys and 39 percent were GMCs and Buicks. GM has said it hasn’t raised shipping fees to pass on to buyers.