Steve Hill, vice president of customer care and aftersales for GM North America, said the program will be "financially attractive for the average GM dealer."
He acknowledges some trepidation among dealers, but he said many who have studied it see the advantages for their bottom lines and for retaining service customers.
Mr. Hill said the combination of offering in-and-out service and more original-equipment parts will help differentiate GM dealerships from independent mechanics.
"If you know you're getting a trained technician and OE parts and you can get in and out in the same day, that's a huge advantage," he said.
Similar to the approach GM has taken with its ongoing facility-renovation program, it wants uniformity in parts and service. Some dealerships have high same-day service rates, but many don't, said Tim Turvey, executive director of customer care and aftersales.
"We wanted to have more of a McDonald's approach to make sure we have a certain core group of parts available to the consumer to fix their vehicle right then," Mr. Turvey said.
Varies by store
Under the new Service Lane Parts system, GM has added dozens or hundreds of parts to the list of items that dealerships are expected to keep on the shelf for same-day repairs. The list varies by store, based on past ordering. Items range from radiators and shocks, to spark plugs and weatherstripping.
GM said it has overhauled its parts-distribution warehouses to get supplies to dealers faster and on the same day they're ordered. If the order can't be filled that day, GM will spring for overnight delivery.
GM estimates the majority of car dealerships spent $6,000 to $10,000 to buy the additional inventory. Some dealers say that they are being asked to carry some parts that they're unlikely to sell, wasting valuable shelf space.
For example, a stocking priority list provided to Automotive News by one East Coast Chevrolet dealer shows that he was asked to carry more than a dozen units of a certain type of fuse used in older-model vehicles. He has sold one in the past 18 months.
Some dealers believe they'll break even because their end-of-the-month bonus payments will outweigh the higher inventory and purchase costs. Others think they'll lose money.
To earn a bonus, dealers must purchase at least 70 percent of the dollar volume of service-lane parts from GM. And they must use at least 70 percent GM or AC Delco parts on repairs to GM vehicles.
Hitting those thresholds pays a bonus equal to 0.25 percent of the dealership's total parts purchases. For example, a store that orders $100,000 in GM parts during a month would get $250.
Dealerships that crack 90 percent on both purchases and repair-order sales can max out at a 4.25 percent bonus, or $4,250 a month on $100,000 worth of parts.
Voluntary
Most dealerships that hit the 4.25 percent level should come out ahead, said Steve Hurley, dealer principal at Stingray Chevrolet in Plant City, Fla., and co-chairman of the Chevrolet National Dealer Council. Mr. Hurley's store should come out $40,000 to $50,000 ahead under the new system, he said.
"It's all about customer retention," Mr. Hurley said. "These are our customers to lose and the aftermarket's to gain."
The program is voluntary. Dealers don't have to gun for GM's purchase or sales targets. But they risk losing the deals they get from wholesale distributors, who could curtail or eliminate their discounts because so much of their business is being shifted to GM.
Rowerdink Inc. is a Grand Rapids, Mich., wholesale distributor to GM dealerships in Michigan. In the Detroit area alone, the company expects to lose roughly half of the $10 million revenue it makes from more than 50 GM stores, said Chris Mauro, Rowerdink GM dealer account manager.
"It could force us to change our discount program," Mr. Mauro said.
Some dealers say they stand to lose money whether or not they hit GM's targets.
A large Midwest Chevy dealer said he figures the new system will cost his store more than $100,000. He has traditionally bought a large amount of inventory from local wholesalers.
The dealer also said he's not willing to let a repair drag into the next day as he waits on an overnight delivery from GM. His parts manager will continue to buy those last-minute parts through distributors, which will count against his purchase loyalty.
Mr. Hill said that even if a parts manager can run down that out-of-stock part on the same day, it's not as good as having the part already on hand.
"If I said, 'I can have your car ready in 30 minutes or have your car ready in four hours,'" Mr. Hill asks, "which are you going to pick?"
This report appeared in Automotive News, a Detroit-based sister publication of Tire Business.
