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July 15, 2021

GM, Chevy putting cafes, beauty salons in dealerships

Last week, when we picked up a news story that GM was offering a year’s worth of free car insurance to anyone that bought or leased a new car, few were thrilled.

Istockphoto_750486-line-of-cars Would this entice you to buy a new GM, we asked? “No way!” said John S. Added reader Steve, “Whatever it takes to sell junk!!!!”

Well, then. Yet domestic car dealers, after the great humbling of the recession, are desperate, and they’re not going to stop trying to get you into their vehicles.

They’ll try promos like free car insurance, and they’ll try anything else. Like, as the Detroit News reports they are now, spending millions to spruce up their dealerships.

According to the newspaper, car dealers are doing anything they can to reinvent the dealership as a place of business. Salesmen for brands like Chrysler, Dodge, Jeep, GM and Buick have been investigating the retail atmosphere of other stores like Target and Starbucks, hoping for some inspiration.

It appears they’ve found it.

In some U.S. dealerships now, the News reports, gone are the “images of burnt coffee in paper cups and snowy waiting-room TVs.” They’ve been replaced by million-dollar renovations to install cafés, boutiques and even hair salons to attract customers.

“We’re making (the dealership) a place you want to be, instead of a place where chairs are piled on top of each other and you’re watching Jerry Springer,” said Con Ahearn, a GM exec with no qualms about taking a dig at his own company.

While each dealer is having to subsidize the costs of any facility upgrades they do, General Motors is offering quarterly payouts for salesmen that perform renovations and hit certain sales targets. Though they’re by no means flush with cash, it’s a good bet that many dealers will take this bait, for fear that they could be wiped out as many American car lots have been in the Great Ongoing Dealership Purge.

Though what’s for the customer to decide is, once again, if all the bells and whistles are enough to bring them back to a domestic car.

One dealership, for instance, now hosts an espresso bar, while another holds a beauty salon. Car owners can get a latté or their nails done while their vehicle is in service.

The big picture question, of course, is back where we started: is this a backward approach? Improved customer service is nice, but is it going about things the wrong way?

Was it poor customer service, subpar dealerships and sleazy salesmen that drove you away from domestic cars, or was it problems with vehicle quality, price and performance instead?

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...