Shots Fired! GM North American President Steve Carlisle Warns Dealers Against Market Adjustments on Z06

 The C8 Corvette Stingray is in its third model year and demand is showing no sign of dropping off. Now with the highly-anticipated 2023 Corvette Z06 right around the corner, we’ve become very concerned about how some Chevrolet dealers are looking at the new American sports car as a cash cow with plans to generate as much profit as possible above and beyond the Corvette’s Manufacturer’s Suggested Retail Pricing (MSRP) at the expense of Corvette buyers.

As more and more stories about dealer malfeasance come to light that includes everything from demanding thousands of dollars in Market Adjustments after the car arrives to intentionally screwing up orders so that customers walk away from the deal, it’s become apparent to GM that it really needs to start policing their dealers better when it comes to selling these in-demand vehicles. And it is not just the C8 Corvette that dealers are targeting for huge price increases. We also have the upcoming Silverado EV, the GMC Hummer EV, and the Cadillac LYRIC which have also garnered much interest from consumers.

We’ve already heard about Chevy’s new plan for allocations and it’s still something we’ll have to wait to see if by moving to an Average Daily Supply model will nudge dealers to stay with pricing the cars at MSRP. Not waiting around is GM’s North American President Steve Carlisle who fired this recent warning shot by telling dealers straight up that they risk having their vehicle allocation redirected to other dealers who aren’t being bad actors in the new car sales process.e are all very excited about recent GM news and product launches including the Chevrolet Corvette Z06, Chevrolet Silverado EV, GMC HUMMER EVs, GMC Sierra EV, and Cadillac LYRIQ. At the same time, we have both been working hard to meet customer demand in a time of constrained supply of inventory due to the global industry-wide semi-conductor shortage.

Unfortunately, it has come to our attention that in connection with some of these announcements and launches, a small number of Dealers have engaged in practices that do not support a positive sales experience for our customers. This puts our collective interests at risk and generates negative press that reflect poorly on GM’s brands and your dealerships. Specifically, it has come to our attention that some dealerships have attempted to demand money above and beyond the reservation amounts set in GM’s program rules and/or have requested customers to pay sums far in excess of MSRP in order to purchase or lease a vehicle.

First, I want to remind you that GM dealers are obligated to ethically and lawfully sell GM Products, as stated in Article 5 of the Dealer Sales and Service Agreement:

“Dealer agrees to effectively, ethically and lawfully sell and promote the purchase, lease and use of Products by consumers…”

“Dealer agrees to advertise and conduct promotional activities that are lawful and enhance the reputation of Dealer, General Motors and its Products. Dealer will not advertise or conduct promotional activities in a misleading or unethical manner, or that is harmful to the reputation of Dealer, General Motors, or its Products.”

Providing customers misinformation about additional sums being necessary for a customer to keep a reservation, is just one example of a tactic that reflects poorly on all of us.

Secondly, we have been advised that brokers are promoting new GM vehicle allocation. While the majority of GM Dealers do not support such behavior, a small number of Dealers still continue to work with brokers despite the following reminders that this is a direct breach of the GM DSSA: Bulletin #20-06 “Transactional Integrity and GM Export Policy” dated July 1, 2020, and Bulletin #21-17 “Sale for Resale or Export” dated November 22, 2021. As stated in Article 5 of the Dealer Sales and Service Agreement: “Dealer agrees that it will not sell new Motor Vehicles for resale” and “Dealer is not authorized . . . to . . . sell Motor Vehicles to persons or parties (or their agents) engaged in the business of reselling, brokering (including but not limited to buying services) or wholesaling of Motor Vehicles.”

GM will be forced to take action if it learns of any unethical sales practices or brokering activities that undermine the integrity that customers expect from the Chevrolet, Buick, GMC, and Cadillac brands. For the small minority of bad actors that are engaging in the conduct identified above, this letter serves as notice that GM reserves the right to redirect your vehicle allocation or take other recourse prescribed by the Dealer Sales and Service Agreement.