Closing the Deal: Gm's Marketing Dilemma and its Franchised Dealers, 1921-41

Abstract

If marketing enticed consumers into a car dealer's showroom, consumers' activities in buying automobiles - trading in their old vehicle, selecting new features and frills, and financing their purchases on instalments - created sources of tension between buyers and sellers, not only consumers and dealers but also dealers and manufacturers. Among automobile companies, General Motors led the field in its techniques for marketing cars and relying on franchised dealers to sell them. GM's CEO, Alfred P. Sloan, Jr., offered a narrative of dealer relations in his classic study, My Years with General Motors. Sloan explained his methods for systematically evaluating dealers' performance so as to sustain a network of healthy retailers as well as the firm's efficiency in co-ordinating production with demand. Although Sloan did not point to the conflicts between buyers and sellers in market transactions, federal regulators did. Their investigations invite an alternative narrative to Sloan's account, focusing on how management used their dealer network to cope with the tensions inherent in marketing automobiles. This perspective draws our attention to the nature of corporate power as seen in the firm's method of distribution; the question of distrust in market exchanges; and the role of the state in shaping car sales and market transactions.

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