BUICK-GMC: For dealers, profitability is the focus

Buick-GMC dealers' profitability is not only the top priority for the brand's new national dealer council chairman. It's the top three.

Todd Ingersoll, CEO of Ingersoll Automotive, plans to keep dealer profitability in mind for every decision he makes during his two-year term, which in turn will help Buick and GMC dealers and the communities they support.

Ingersoll, who replaced Robert Morris III in February after a roughly one-year term, is a first-generation car dealer. He started as a salesman at a Saturn store after serving in the U.S. Navy as a rescue swimmer and anti-submarine warfare operator in 1991.

A decade later, he bought that store and another Saturn dealership and operated the stores until General Motors killed the brand as part of its 2009 bankruptcy.

He now owns three GM dealerships — Ingersoll Auto of Pawling, in New York, and Ingersoll Auto of Danbury and Buick-GMC of Watertown, both in Connecticut.

Ingersoll, 47, spoke with Staff Reporter Michael Wayland about Buick's profitability, the next-generation GMC Sierra and Buick's growing lineup.

Q:How was 2017 for Buick and GMC dealers?

A: Overall, the year was good for most dealers. There's certainly a flattening, or a plateau, in the growth of the auto industry in general. Of course, that's felt in our own brands, although we were able to eke out some improvements.

GM has concentrated on retail share; does it matter for dealers what kind of sale occurs?

It matters for us what type of commercial business GM is doing. Smartly, they have really taken down the fleet side of their business that was dedicated to going to rental cars, which derogated the value of the cars long term with the residual values.

I have a commercial business that I do, too. It's very profitable and it works well for everybody — GM, the residuals and everything — when we're ultimately selling to the final customer. So, they've been able to grow that side when it comes to commercial business but shrink the rental portion, which has been very helpful for all of us, and long term, will play a bigger role in our success.

What do dealers want GM to do to help their profitability?

As a council in general, our focus — the first, second and third thing that we are concerned with — is the profitability of our network and working to strategize with GM about the best way to tackle those issues.

We have programs like EBE (Essential Brand Elements), SFE (Standards for Excellence) — there's a multitude of plans in place. Working to get the bulk of the dealers to hit them consistently so they can garner the most money they can is a goal of ours.

How do the revised SFE programs help dealers for 2018?

Any changes that we make, or have been made, whether it's SFE or EBE, it takes a while to absorb them and get your arms wrapped around them. I think that's the kind of process everybody's in right now.

One of our goals, long term, is to instead of having it maybe be an annual program, have it be two or three years that you're locked in. That way you can plan accordingly. That's particularly true with EBE, which is kind of broken up into two parts now — compliance, which is the facility, and the other is performance. As dealers kind of chip away at that, figure it out and tweak the areas there that need to be fixed and adjusted, it would be good to run with some consistency there for a longer period.

Is that a possibility on the table now?

The good news is, any time we've discussed these issues with the leadership team at Buick-GMC, they have been absolutely open and willing to put everything on the table and say, "OK, let's look at this and see the best way that we can all win from this."

I think there's a general understanding that we're all in the same boat and we all want the same thing — to win at a wholesale level.

Aside from flattening sales, what challenges do Buick-GMC dealers face?

Any time you're launching an all-new pickup like we are in the 2019 Sierra — with some really great changes, for instance, the MultiPro tailgate and carbon fiber box — the challenge there is to sell down the 2018s. This is one of those years, as we migrate to the new product and sell down the old, we navigate through that together. The good news is, again, they are 100 percent committed that we don't miss a beat as we sell down the 2018s and bring in the 2019s toward the latter end of the year.

Is part of that GM continuing to build the current-model pickups alongside the next generation? What do you think about that?

Any time we've been able to successfully transition from one model year to the other, the most successful ones are when they come out nice, slow and even over time. So, if we can wind down the 2018s and bring up the 2019s almost at equal rates, then I'd consider that a great success. I think it will work just fine.

How important is the Sierra to the brand and dealers — particularly having more differentiation between the current and next-gen pickups?

It is more distinctive than the Silverado than we've seen traditionally. A lot of times, the two trucks have almost been right on top of each other. I think a lot of attention to detail was paid to make a greater distinction between the two vehicle platforms this time, which is fantastic.

When you look at the opportunity with Sierra, it is GMC. It represents the largest portion of our sales. It's critically important to us and critically important to General Motors that this be a smooth launch and ultimately a great seller.

What do you think of the 2019 Sierra?

I think they knocked it out of the park. The design is great and the interior is great. I think it's remarkable that when you step back and look at a company that's been building pickups for 100 years, they're still looking to innovate all the time and never take for granted something as simple as the tailgate and say nothing else can be done with that. You step back and go, "Man, how did we not think of that over 100 years?" It really puts the whole industry on notice to say, "If you don't have something like this built into your tailgate, you're way behind the competition now."

Is the next-gen Sierra the biggest thing dealers are looking forward to?

Yeah, but on top of that, we've got some great changes over at Buick. We're getting ready to launch the Regal and TourX. The Avenir, as a brand, is kind of feathering in now through Enclave. The latest iteration of that is coming out in LaCrosse, so we have it on both sides.

But for sure, I think dealers are looking forward to having such an improvement in what already is a great vehicle.

What do you think about Buick repositioning the Regal from traditional sedan to wagon and sportback?

One challenge the whole industry is facing is the rapid decline of sedans and acceleration of crossovers. Everyone has written about it and talked about it, and in the retail world, we see it. I think they took a bold step when they said, "We really have to revisit Regal and look and some of the things where we think we can really improve it." For instance, all-wheel drive, making the wagon version and one step further, the hatch. It's being well-received by the guests that are coming in and looking at it now.

The trick for us is making sure that it gets its fair share of recognition for not only its quality but its beautiful design. And that's tricky to do in a market that's, again, shifting so quickly away from sedans in general.

Buick has been one of the brands leading the charge to crossovers. Does having those crossovers next to the Regal make it harder to sell?

I don't know that it makes it harder. I think it allows for the guests that traditionally want a car to have it. There are some people that say, "If it has-all wheel drive, I'll take that version of it. I don't necessarily need the additional space of the crossover." So the Regal will work just fine and because they can get it in all-wheel drive, they're fine to transition to that car. I don't think it takes away having the other ones with it.

What are your thoughts on moving Buick upscale with Avenir?

We've obviously enjoyed some great success with Denali in the GMC brand. I think it only makes sense, when you look at the two brands that are under one roof — Buick and GMC — that Buick has its own version of Denali, and that is Avenir.

In the new Enclave, it's selling at a very brisk pace and we're seeing it well-received by many, many guests that come in to look at the car. They're blown away by the Enclave in general and the Avenir is the cherry on the sundae.

So Avenir is starting to pay dividends for dealers on pricing and overall reputation?

Yes. You could say that maybe at the beginning we're seeing a richer share than we normally would because there are some folks who have been waiting for the new Enclave to come out and they just want the latest bells and whistles. But the guests I've talked to on the showroom floor are just really blown away by the extra touches that the Avenir gives you.

What are the expectations for Canyon sales in 2018 — particularly with the next-generation Sierra coming? Canyon sales were down 14 percent in 2017. Was that because of the Sierra, the segment or, as some executives have mentioned, marketing efforts?

I think, like anything, there's not an unlimited budget when it comes to marketing. And so, they, our partners at GM, have to pick and choose their battles. Hopefully, we have seen a leveling off of the year-over-year decline. But, I can speak for myself, we're not looking to go backwards on our Canyon sales. And I would speak for that network, that they too would be pushing to make sure that we hit our targets this year.

Were dealers upset that GMC isn't adding a medium-duty commercial version of the Sierra like Chevy is for the Silverado?

I think that any GMC dealer would be remiss if they didn't say they were disappointed that they weren't participating in the medium-duty. The decision was made to kind of streamline that and it's one that we have to live with. But you never know what the future holds. And perhaps, down the road, that could change.

What are your goals and priorities as council chairman?

Again, our first priority is working on network profitability; and it's our second and it's our third. Everything we do is going to be around that for the foreseeable future because we think it's really what our charge is: to make sure our partners know how critical that is to everybody's success.

And communication, I think we will work hard to make sure we're communicating the things we are working on and to let the network know that they do have a voice through us. The guys that I'm working with care passionately, not only about the brand, but every dealer they represent. It's a great, great group of dealers that are on the council and I'm proud to serve with each and every one of them.

Buick's lineup has grown in recent years, while GMC has been somewhat stagnant. Are there more products that dealers would like in the GMC or Buick lineups?

I haven't met a dealer yet that doesn't want more products. So the short answer there is, yes. Every dealer wants more products and, by the way, faster and redesigned more frequently. If you could deliver all those things, it would be the absolute home run of the century.

My guess is that leadership within the two brands is constantly evaluating where the next strategic move should be. I take comfort in the fact that they've been way ahead of the competition on many of the moves that they've done. And a perfect example of that is Encore entering that small compact crossover luxury market. That didn't really exist before Buick started playing there. It's grown exponentially and now every major manufacturer has a car that size that they're selling, and we led the charge.

What about specific segments? Buick has a small crossover, but GMC doesn't.

That's a really good point. Looking at GMC, it's a brand, as we know, that stands for "professional grade," so where exactly it can play, I would like to see three or four more entries for the brand, but we'll take a new Sierra, and certainly, that one is on the short list. And the new Terrain that they just finished redesigning is phenomenal as well. We've had great success with that car.

One of the things when you look at the success of GMC, you look at the Acadia, you look at the success we've had with Terrain, with Canyon, and certainly we will have with the new Sierra. It makes sense. It's a winning horse. It does great for GM. It does great for their dealers. My guess is they'll continue to invest in the brand and hopefully that means even more entries for us.

How do you feel about the marketing campaigns for the brands?

From a marketing standpoint, I think it's very clear. "Professional grade" resonates. People get it and you can evolve it but at its very core it is a super message that does really well for GMC.

"That's a Buick" is probably one of the greatest campaigns that's been put together in the automotive industry in quite some time. It really cuts through the clutter and allows people to really think about Buick for the first time. And what we're also seeing is millennials not coming in with any preconceived notions about Buick. That's really helpful — they aren't necessarily loyal to any particular brand yet, so when they're shopping, they're looking at the cars going, "Man, these are really beautiful. These are nicely done." They're not coming in thinking this was my grandfather's "X, Y and Z." They don't have those preconceived notions, which is not only refreshing for Buick dealers but, I think, ultimately, it's turning into more car sales.

Buick has had a large presence during March Madness. Has that been paying off for dealers?

We've always gotten good lift out of our association with basketball. It's proven itself out. I think, by the fact that they're still willing to invest a serious amount of money into that program, they wouldn't do that if it wasn't paying the dividends they expected it to.

How important is Denali to dealers' profitability? How much more can it push prices up for dealers?

Denali is a very important part of the success of not only our profitability but the overall GMC brand. It is a subbrand underneath GMC, where people go, "Yeah, it's a GMC Denali." They almost think it's a car or truck itself. That name holds a lot of weight.

As far as where it is on pricing, if you're adding content and guests see value in that, the sky's the limit. You can add stuff, and technology is evolving and changing all the time, and you can do it under the Denali name. I think it's a great way to introduce some really sophisticated features down the road that you could see coming into the auto industry.

Can Avenir get to Denali's status?

It's a pretty high peak to climb to make Avenir the same brand equity that you get with Denali. But it took Denali a decade to get to the levels they're at now. You know that old saying, "A long journey starts with the first step," so we're well on our way to having the Avenir developed for Buick.

Again, it's not unreasonable to say that we'll continue to see growth in Denali with GMC and the numbers that we want to hit this year.

GM last year sold Opel. Are dealers worried about Buick's future lineup, given that many of the brand's vehicles came from those operations?

I think there's always a concern about what the future product portfolio looks like for any of the brands that we sell, and Buick is no exception. We trust in the fact that with our input and GM's research and knowledge that they'll navigate Buick to the place it needs to be.

To your point, you're talking about Europe, while [Buick is] thriving in China. So, the opposite end of that is what stuff you can leverage there. So, we'll stay tuned to see what they will come up with, but I have every confidence that they will have a world-class product portfolio for us to sell.

Why did you want to become a dealer?

My stores are in the area I grew up in. Being a first-generation dealer in the town that you grew up in has been one of the greatest privileges of my life — to represent the brands that I love passionately and do so in a way you're part of the community. I feel car dealers are people who play large roles in their community. They employ a lot of people, they pay really well and we never lose sight of the fact of how fortunate we are to not only have the brands that we do but you have a moral obligation, I think, to give back to the community in which you do business.