LAS VEGAS — New connectivity tools offered to General Motors dealerships showcase the disruptive potential of the company's expansive data-collection and information-technology enterprise.
The tools promise dealers the kinds of insights into their business operations that are typically the domain of dealership management system providers and other third-party vendors. They are intended to boost dealer profits and cement a more transparent trusting relationship between factory and retailer, just as GM's OnStar connectivity product has tried to improve customer loyalty and confidence in the automaker.Bell: Making it easy for dealers
At the center of those relationships is the trove of data GM has accumulated over two decades of using OnStar in its vehicles, along with the analytical and software development capability it has amassed over the past five years by bringing
nearly all of its information technology work in house.
Those technology resources represent a competitive advantage — and a launch pad for new categories of service businesses — the significance of which many in the industry are just beginning to grasp.
The newest GM offerings to dealers include a real-time brand standard monitoring system called Excellence Executive Dashboard — launching by June — and OnTrac, a program set to launch this year to help dealers get the most from their service loaner fleets.
With the dashboard, dealers can enter a dealership ID code into a Web application to find out how well they are performing under GM's incentive and standards programs such as Standards for Excellence, Essential Brand Elements and Parts and Service Excellence.
The goal, according to Scott Bell, Chevrolet director of sales operations, is to make it "as simple as possible for dealers" to track their status and compare it with others in their region, district and zone.
OnTrac, said Bell, works through OnStar and will "take the burden off" dealers to track the location, mileage and maintenance needs of service loaners, and pinpoint the right time to pull the vehicles from the fleet to preserve their residual value.
"That's what dealers care about," said Keith McCluskey, incoming head of the Chevrolet National Dealer Council for 2019 and CEO of McCluskey Chevrolet in Cincinnati. "We care about our franchise, our business and improving the bottom line."
While dealers have been wary of automakers being overly involved in their businesses, GM believes it has the wherewithal to provide better, less expensive tools than many third-party vendors to increase dealer profitability — either directly, or by virtue of its bargaining power on behalf of its thousands of U.S. dealers.
"The vendors have great solutions," Bell told Automotive News this month
during the Chevrolet Dealer Business Conference here, "but they're negotiating with dealers one on one. What the dealers asked us to do, was let's unite and let's go negotiate as a group. It's stronger."
That strength comes not only from GM's size, but from its ever-expanding IT operations, which were expected to deliver more than 800 projects in 2017 — including the ones outlined at the Chevy dealer event, which attracted nearly 3,000 dealer representatives from about 1,800 stores representing 80 percent of the brand's U.S. sales.
head of the Chevrolet National Dealer Council, said many dealers are beginning to understand that the "you build 'em, we sell 'em" formula is no longer a sustainable business model.
"We have to do this together," said Bowsher, owner of Carl Black Automotive Group in Georgia. "If you don't you are not going to make it. You have to take advantage of these things."
To keep that IT machine well-fed, GM is expanding the reach of OnStar, through which it can collect and dispense vehicle information. Basic OnStar services such as vehicle diagnostics, dealer maintenance notifications, driver report cards and the will be offered free for 10 years on all new vehicles bought after May 1, up from the current five years.
The extended time frame ensures the company's continued data collection and post-purchase connection to consumers through OnStar, which along with other noncore businesses, represents a $1.5 billion profit growth opportunity over the next several years, according to GM CFO Chuck Stevens.
GM has launched an ad campaign underlining the emergency-response features of OnStar, a key selling point for higher-level subscriptions.
"We are at the front end of opportunities associated with our OnStar business," Stevens said during the Deutsche Bank Global Auto Industry Conference in January, adding that there are "significant data monetization opportunities on the horizon."
GM is also sharing revenue with dealers who get people signed up for OnStar, whether it's a new- or used-vehicle buyer or someone coming in for service.
initiative and other new programs were part of a Profitability Pavilion at the Las Vegas meeting that included more than a dozen stations designed to help dealers increase profits and meet the company's SFE, EBE and PASE standards.
Turning number-crunching power into a profit-boosting utility for dealers is similar to what GM's IT operations did for its internal operations last year with a tool called Maxis.
Essentially an advanced search engine of GM and third-party data, Maxis can be used by any GM employee for tasks such as projecting future warranty or recall costs, calculating break-even points during a recession or tracking market and vehicle segment trends. Manufacturing executives can monitor capacity and vehicle production by plant or anticipate plant downtime based on current and historic sales trends.
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