GM Sends A Stiff Warning To Dealers About Price Gouging

GM Sends A Stiff Warning To Dealers About Price Gouging

In a recent statement by GM North America President, Steve Carlisle, the automaker didn’t mince words in letting its dealer network know that price gouging is not the preferred way to do business at GM. With the 2023 Corvette Z06 on the horizon, many were anticipating huge markups, or “market adjustments” as they’ve come to be known throughout the sales floor. The Corvette Action Center reported on the statement released recently.

Steve Carlisle was recently appointed to the position, moving over from senior vice president and president of Cadillac mid-way through 2020. With Carlisle’s appointment, GM put one sales, service, and marketing leader across its full portfolio of automotive and connected services brands in North America, including Chevrolet, Buick, GMC, Cadillac, OnStar, ACDelco, and GM Genuine Parts. He reports to GM President Mark Reuss.

In the report, Mr. Carlisle stated, “We 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.

Is tacking on an additional $38,000 simply a market adjustment or gouging? (Photo: CorvetteActionCenter.com)

Being Corvette-specific here, with all the delays and shortages Corvette has suffered, customers, money in hand, must be getting weary of waiting. And, we all remember that gasp when Mark Reuss announced the C8 Stingray’s starting MSRP. Bringing that much car in at that price point was simply unheard of up until that time. Now, market adjustments are putting C8 Corvettes out of reach for many of those who felt they had a chance to finally get one.

The 2023 Chevrolet Corvette Z06 was again, touted as “a LOT of car for the price.” But is that price negotiable?

Mr. Carlisle notes that “…it has come to my 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 reflects poorly on GM’s brands and your dealership.”

He goes on to remind said dealers of the Dealer Sales and Service Agreement, Article 5 to be exact, which states, “Dealer agrees to effectively, ethically and lawfully sell and promote the purchase, lease and use of products by consumers…” He cuts right to the chase by adding, “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.”

Steve Carlisle, GM senior vice president and president, Cadillac (General Motors Photo)

In a not-so-soft-spoken manner that surely swings a big stick, Carlisle finishes up his statement by adding, “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.”

Just to show he is a reasonable man, he concludes, “If you have any questions or comments, please reach out to your Zone Manager.”  Yeah, so who in their right mind is going to go shake that tree after this just gets dropped?

The C7 ZR1 was touted as the fastest, most powerful Corvette ever. And, at $100,000-plus, the price showed it.

So, what do you think? Does the “adjustment” simply show that capitalism is alive and well in the US of A, or should dealers get smacked if they’re caught digging too deep into the cookie jar? As another argument, is the adjustment simply putting Corvette into the price range where many felt it should have been all along? Remember the C7 ZR1? No one blinked when GM put a $100,000+ MSRP on that car. Is this a case where Chevy simply had a return back to its roots of a great car at a good price and several dealers didn’t open that memo? Let us know your thoughts in the comments below. We’d love to know what you think!

About the author

Andy Bolig

Andy has been intrigued by mechanical things all of his life and enjoys tinkering with cars of all makes and ages. Finding value in style points, he can appreciate cars of all power and performance levels. Andy is an avid railfan and gets his “high” by flying radio-controlled model airplanes when time permits. He keeps his feet firmly grounded by working on his two street rods and his supercharged C4 Corvette. Whether planes, trains, motorcycles, or automobiles, Andy has immersed himself in a world driven by internal combustion.
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