GMC Sierra Reservation Program the Latest Effort by OEMs to Interface Directly with the Retail Customer

Up until now, the OEMs have used the sale of electric vehicles as an excuse to bypass franchised motor vehicle dealers by allowing customers to order those vehicles directly from the manufacturer. The argument was that electric vehicles need to be sold in a new and more modern way similar to the means by which Tesla sells its vehicles. Of course, customers have always been able to custom order vehicles through a franchised motor vehicle dealership from the manufacturer.   

Now, the pretense that electric vehicles are the reason OEMs need to get more involved in the retail sale of their vehicles is gone. General Motors has announced that the GMC Sierra pickup truck will be sold on a customer order only basis meaning that, except for the possible display and test-drive vehicles, dealers will not be able to order the GMC Sierra pickup truck to maintain as dealership inventory. Instead, like the electric vehicles before it, the GMC Sierra pickup truck will only be available to be ordered by customers directly from General Motors. Upon making the order, the customer will designate their chosen dealership in which to complete the purchase and delivery of the truck. 

Either allowing or requiring customers to order new vehicles directly from the OEM is a fundamental change in the manufacturer-dealer-customer relationship. Historically, dealers invested in their franchise in exchange for the exclusive right to sell and service the manufacturer’s products to the retail consumer. The manufacturer’s role was to provide those products at wholesale to the franchised dealers. This latest effort by General Motors to further infringe upon dealers’ rights and relationships with the retail customer raises serious concerns that the GM Dealer Agreement and state franchise laws have been violated.