The ignition switch recall is raising anxiety in General Motors showrooms in the US, dealers who increasingly are fielding calls from customers concerned about the safety of GM cars, are reporting.
Reuters cited a dealer group in Texas which, having expected a good March after a strong February, came up 28 vehicles short of its goal of selling 200 cars and trucks.
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An executive told the news agency bad news centered on the ignition switch recall contributed to the group’s sales miss.
“It will take some time for the brand to gain back the customers it lost,” the executive said. “But I have got to believe that General Motors will use this opportunity to really focus on improving the safety of their product.”
Reuters’ interviews with over 20 US GM dealerships this week revealed concerns that sales would be pressured, even in a recovering car market. Dealers also made clear there’s an escalating number of worried current GM owners and demands for repairs threaten to clog some repair facilities.
“They are calling for information. People are a little confused about what they need to do. There are a lot of these cars out there,” a Las Vegas Chevrolet dealer told Reuters. It had been getting about 50 customer calls a day for the last three weeks.
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By GlobalDataSince February, GM has recalled 2.6m vehicles due to concerns about ignition switches that unexpectedly turn off engines during operation and stop airbags, power steering and power brakes working. So far this year, GM has recalled a total of nearly 7m vehicles, or about the same number recalled in the previous four years combined, Reuters noted.
The news agency compared GM’s current recall with the Toyota one, in January 2010, of nearly 2.6m vehicles in the United States and Canada to fix sticky accelerator pedals. The recall and the controversy leading up to the decision punished sales, the report said.
Less than two weeks after the recall, Toyota reported a 16% drop in January 2010 US sales. Sales fell again in February before rebounding in March. And the automaker’s US market share hasn’t regained its peak of 17%, set in 2009.
In contrast, GM’s numbers improved in March, the month after the first stages of the recall were announced. Dealers delivered 256,047 vehicles in the United States in March, a 4% year on year rise. Retail sales were up 7% and GM said it gained retail market share.
Overall, the auto market is in recovery mode and a lot of dealership executives are staying optimistic, Reuters said.
Managers of GM dealerships near the major US cities of Boston, Cleveland, Los Angeles, Miami, and San Antonio, told the news agency they were spending a lot more time allaying customer concerns.
They reported offering more rental cars, agreeing to more trade-ins and telling customers to lighten their key chains.
Several dealership executives said the bad news was distracting their teams from making their sales pitch in the showroom.
Some customers don’t want to wait weeks for their cars to be repaired. GM has offered some incentives for trade-ins and dealers told Reuters the offer was being taken up.
One general manager said his dealership had taken in about six Chevy Cobalts for trade-in since the recall.
Earlier report: Recall controversy hasn’t hit GM sales – yet
