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GM threatens predatory dealers with order cancellations, non-transferrable warranties

General Motors will launch a second salvo against misbehaving dealerships next week with a new set of policies aimed at curbing predatory markup strategies. With the new Chevrolet Corvette Z06, GMC Hummer EV SUV and Cadillac Escalade-V about to head into production, GM is putting its foot down yet again. Dealers that attempt to circumvent GM's markup restrictions by dealing directly with brokers or other resellers could find themselves in a particularly nasty spot, as the company is threatening to withhold future allocations and end the transferability of warranties when dealers facilitate the reselling of vehicles within 12 months.  While this may help curb some dealership chicanery, it's possible the real loser in such a deal could end up being the customer who unwittingly ends up with an un-warrantied vehicle. We suspect GM has accounted for that, but we'll have to wait until next week to find out exactly how these new policies will be enforced.

Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

Cadillac XT5, XT6, GMC Acadia recalled for two issues

General Motors is recalling three model years of the Cadillac XT5 and XT6, and the Cadillac's GMC sibling, the Acadia. The first recall has to do with the rearview camera. On 2020- and 2021-model-year XT5s, XT6s, and Acadias optioned with Surround Vision, insufficient crimping for the coaxial cables could cause a degraded signal from the rear camera, or cause the signal to fail. With all passenger vehicles required to have a working rearview camera, that's not an ideal situation. Only crossovers with Surround Vision are affected. The population at issue counts 95,231 vehicles, build dates being: XT5s produced from May 1, 2019 to June 23, 2021 XT6s built from February 25, 2019 to June 24, 2021 Acadias built from May 6, 2019 to June 24, 2021  The automaker hasn't been informed of any crashes or injuries related to the problem, and will begin mailing letters notifying owners of the issue on November 7. The fix is a trip to the dealer to have the cables inspected and replaced if necessary. Concerned customers can contact Cadillac customer service at 800-458-8006 or GMC customer service at 1-800-462-8782, then refer to GM's recall number, N222378380. Alternatively, they can get in touch with the National Highway Traffic Safety Administration (NHTSA) Safety Hotline at 888-327-4236 (TTY 800-424-9153), or go to www.nhtsa.gov, and refer to campaign number 22V709000. Another recall concerns just the 2023 Cadillac XT5 and XT6 and 2023 GMC Acadia units that were built on August 9, 2022. That day, a printer in the Spring Hill, Tennessee, Assembly Plant malfunctioned, producing vehicle labels for the driver's side B-pillar with illegible tire size information. That's a violation of a subsection of Federal Motor Vehicle Safety Standard No. 110. Only 24 units are affected, the fix being a jaunt to the dealer for a label with readable information. Owners who don't want to wait until November for letters from GM can contact Cadillac customer service at 800-458-8006 or GMC customer service at 800-462-8782, and mention recall number N222381690. Or they can head to the NHTSA Safety Hotline at 888-327-4236 (TTY 800-424-9153), or www.nhtsa.gov, and refer to campaign number 22V708000.