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NAMVBC Looks At GM's New Venture, General Motor Retail Holdings

8 October 1999

NAMVBC Looks At GM's New Venture, General Motor Retail Holdings -GMRH-, Closely

    DALLAS--(AutomotiveWire)--Oct. 7, 1999--The National Association of Motor Vehicle Boards and Commissions is concerned about the recent announcement by General Motors to develop factory owned stores that will sell direct to consumers.
    The concept is not new according to Rick Alexander, Executive Director of the NAMVBC, "Ford tried this recently and failed in several states after lobbying to receive legislative approval to operate dealer owned stores. As dealer associations went to their state legislatures to protest company owned stores, Ford had to back out of some states after signing agreements with some dealers."
    It is not clear why GM would try this venture after the recent legislative session saw 10 states pass new franchise restrictions. Some states defined company ownership even more by stating how long manufacturers could own stores. Alexander said, "We recognize the concern that the franchise dealers have in this country right now and hope that we can talk to GM about this issue. GM has stated that they need to get better acquainted with consumers today, and we think they should also; however, we think that GM should look at working with its dealers more closely concerning customer retention instead of going direct."
    As regulatory agencies, it is their responsibility to 'enforce' the laws as determined by their respective legislative bodies. It is these bodies -- through the legislative process -- that determine the public policy that the members of the NAMVBC, as regulators, are to carry-out. NAMVBC's members do not set public policy -- that is the responsibility of the elected officials, according to the NAMVBC.
    GM's commitment to improving the distribution of vehicles and getting better acquainted with the customer should be applauded. However, trying to rechannel the buying process back to the manufacturer should be "put on hold" until everyone has had an opportunity to discuss the consequences of this new process of trying to sell automobiles in this country, said Alexander.
    The National Association of Motor Vehicle Boards and Commissions, whose headquarters are in Dallas, was established in 1976 to organize the motor vehicle boards and commissions in this country that enforce and license motor vehicle dealers. The NAMVBC wants to promote the continuity of laws between states regarding the licensing and regulation of motor vehicle dealers through the exchange and dissemination of information and to establish forums for industry organizations to promote the understanding of government authority and the motor vehicle industry. By providing a clearinghouse of information for government agencies and the motor vehicle industry, the NAMVBC can help combat unfair practices and encourage ethical and sound business practices of licensees in the motor vehicle industry.