General Motors Corp. is trying to discourage its car dealers from selling vehicles with popular-and lucrative-non-factory custom wheel sets.
With memories of the Firestone-Ford Explorer rollover crisis still fresh, GM has warned dealers that it will not assume warranty costs or defend product liability suits that involve non-GM wheels.
Some dealers have stopped selling the sets, but others are ignoring the warning as sales of custom wheels skyrocket.
Meanwhile, safety agencies say data do not exist on the potential hazards of custom wheel sets.
``We're very wary-not a little wary,'' said Pete Gerosa, GM vice president for field sales, service and parts. ``It's magnified itself because of the Firestone issue.''
But some dealers question GM's motives in pressuring them to avoid non-GM equipment when GM is trying to increase sales of its own accessories.
``GM's position, from a dealer's perspective, is that they love aftermarket accessories-as long as they're GM accessories,'' said David Butler, general manager of Oldsmobile, Cadillac, Buick and Hummer stores at the Suburban Collection in Troy, Mich.
One auto dealer said gross profit margins on wheel sets are in the 25-percent range, or $500 on a $2,000 set.
No safety watchdog
GM executives said safety is their main concern for discouraging the sale of custom wheel sets. John Smith, group vice president for vehicle sales, service and marketing, acknowledged that GM wants to get more accessories business, as evidenced by its growing exhibits at the annual Specialty Equipment Market Association (SEMA) trade show in Las Vegas.
But, Mr. Smith said, altering wheel sizes can detract from a vehicle's handling.
``Some wheels and tires may not work well with a chassis,'' he said. ``Some wheel-and-tire combinations we're not comfortable with. We want to be very studied in involving ourselves here.''
Mr. Smith said GM believes that its ``unique, extensive tire-and-wheel engineering activity'' has helped it avoid problems such as the Ford-Firestone rollovers. GM tests both the quality of wheels and their suitability for a specific vehicle, he said.
Safety groups say little data exist regarding effects of custom equipment. A spokesperson for the National Highway Traffic Safety Administration said the agency defers to manufacturer recommendations about tires and wheels.
Brian O'Neill, president of the Insurance Institute for Highway Safety in Arlington, Va., said safety problems regarding custom wheels ``are unlikely to show up in accident statistics.''
But, he said, adding bigger wheels to sport-utility vehicles could increase the risk of rollovers. ``If they put bigger wheels on SUVs, that clearly has a safety implication because they're raising the center of gravity,'' Mr. O'Neill said.
Car dealers said GM has been slow to provide wheels that customizers want, particularly for cars. John Bergstrom, CEO of Bergstrom Corp., a dealership group in Neenah, Wis., said custom wheels are often impulse buys, so dealers need to anticipate buyers' desires.
``You have to have them on the vehicles, and you have to have them on display,'' Mr. Bergstrom said. ``You can't say, `You can order them out of a book.'''
Suburban Collection's Mr. Butler said GM has notified dealers that it will not help defend any lawsuit arising from injuries attributed to non-factory equipment. Non-GM equipment is not covered under GM warranties.
In addition, GM earlier told dealers that custom equipment could not be included in the residual value of leased vehicles, meaning that retail customers must pay the entire cost of custom equipment during the term of the lease. That raises lease payments sharply-about $60 per month on a $2,000 set for a three-year lease-and has cut into the popularity of some kinds of custom equipment, Mr. Butler said.
Barry Pryor, president of Sewell Village Cadillac-Saab-Hummer in Dallas, said GM's warnings prompted a ban on non-factory wheels there.
``We're very concerned about it, given the concern that GM has,'' Mr. Pryor said. ``So we're not doing it right now. We're selling only factory equipment.''
That means the store is losing out on wheel sales, he said.
``We'd like to see GM come out with more choices in terms of style and size,'' he added.
Market is growing
Other dealers aren't dropping custom wheels. They say the market is expanding rapidly, fueled by consumers' desire for a distinctive vehicle and by the extra spending power that GM's heavy incentives provide to consumers.
Mr. Bergstrom, who has 22 GM franchises in 13 locations, said his stores sell only premium aftermarket brands. Most buyers spend $1,000 to $3,000 in the exchange price-net of the refund for the GM equipment taken off the vehicle.
``You would not believe what is happening in the world of wheels,'' he said. ``Anyone who's not paying attention is missing out.''
SEMA statistics show sales of aftermarket wheels increased to $1.1 billion in 2001 from $453.1 million in 1991. Specialty tire and wheel dealers compete with auto dealerships for this business.
Carl Sheffer, SEMA vice president for auto maker relations, said aftermarket wheel makers have emphasized safety standards in the past 15 years-and, in some cases, supply wheels to auto makers as original equipment.
They have access to auto makers' engineering drawings for new vehicles under SEMA technical exchange programs, Mr. Sheffer said.
But, he added, customizers need to make sure wheels are the right size for their vehicle.
According to Mr. Gerosa, GM is trying to develop custom wheels to satisfy the market.
``Our testing process on wheels is way above the standard, so it takes longer for us to get a wheel through the system,'' he said. ``We're trying to figure out if there's a way to do this and still have the right standard. You don't want to denigrate the standard at all.''
Meanwhile, customizers keep buying wheels. Car dealer Mr. Butler says he needs to have the equipment buyers want: ``They tend to come in and say, `I gotta have 22-inch chrome wheels on the Escalade.' ''