GM Wants Dealers to Capture Accessories Revenue
BY CLIFF BANKS Ward's Dealer Business, Nov 1, 2002 12:00 PM

If you're a General Motors Corp. dealer and want to make some fast and easy money, we have a word for you: accessories.

It's a $27 billion market and franchised dealers capture only 10% of that while the aftermarket companies control the rest.

GM executives say the auto maker is intent on changing that equation. The plans are ambitious. “If we're not growing this business by $100 million a year then we're not doing our job,” says Doug Herberger, GM North America vice president-service and parts operations.

The strategy is occurring on multiple fronts. First is the development process. In January 2001, GM created an accessories division and integrated it with the service and parts operations (SPO). Currently there are about 700 new accessory products being developed.

“Our strategy is to sell more of what we have and develop more must-have products,” says Bob Triulzi, general director-GM accessories.

Before, the divisional brands and SPO worked independently when developing accessories. There was not an integrated or strategic effort at designing customized accessories for each brand.

Now, however, development is included in the vehicle design process. “It's a total team company effort now — from engineering on down. It's not just an SPO effort anymore,” Herberger says.

Hummers have more than 40 accessories available. And the vehicle is being built with the accessories in mind. For example, the mounting holes for the assist steps are pre-drilled and the wiring and mounts for the roof rack lights are set while the vehicle is being built.

The installation and fit of the accessories is vastly improved. Dealers should be happy. They don't have to worry about drilling the holes and forcing accessories to fit on the vehicles anymore.

Customizing the accessories for the vehicle is becoming standard procedure for GM. The Chevrolet SSR, for instance, will have a full line of accessories accompanying it at its launch next summer.

Herberger says since the initiatives were put in place 18 months ago, the accessories division has increased its business 50%. While declining to provide an actual figure, Herberger does say Hummer customers are spending at least $1,000 on accessories per vehicle.

So, what's the dealer's role in all of this? That's easy — just sell the accessories. There is money to be made. Industry data shows the average truck buyer will spend $1,200 on accessories within 90 days of buying the vehicle. And most of that money goes to the aftermarket companies.

To assist its dealers in capturing more of the market, GM a few months ago launched its Accessory Merchandising Personalization System (AMPS) to help dealers sell accessories more effectively.

The AMPS program moves the sale of accessories from the parts department to the front-end sales process. The sales personnel and finance and insurance departments can sell them as they are selling the vehicle.

And GM customers can incorporate the cost of accessories into the financing of the new vehicle. The accessories are backed by a 3-year/36,000-mile limited warranty.

The program provides promotional materials such as accessories magazines, window stickers for the vehicles and brochures and catalogs for the showroom. Sales training also is available for dealership personnel.

The investment for dealers is $300 to $1,500. Currently, 1,000 GM dealers are participating in the AMPS program.