General Motors pulled a multimillion-dollar rabbit out of its hat Friday, telling its dealers it has figured out a way to resume offering two popular features on its vehicles. The move could keep some of Cadillac, Chevrolet, Buick and GMC’s most loyal and affluent buyers from defecting to other automakers.
Starting in the first half of 2022, the automaker’s dealers will be able to activate heated and ventilated front seats on vehicles built without the features due to a shortage of the computer chips that control them.
GM had initially said the shortage would keep it from offering the immensely popular features on the majority of its 2022 vehicles. It planned to save its limited supply of chips for the highest priced, most profitable models. GM is building vehicles without the chips.
GM now expects to have enough chips to have dealers retrofit them beginning late in the second quarter of 2022, making the features available.
Heated steering wheels, another popular feature, aren’t part of the program. They remain unavailable on most model year 2022 vehicles.
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Heated seats are customers’ favorite option, according to product planning consultant AutoPacific. Their absence could drive Chevrolet, Cadillac, GMC and Buick customers to other brands.
“Years ago, heated/ventilated seats and a heated steering wheel were considered perks but today’s buyers are increasingly prioritizing them as nonnegotiable,” AutoPacific manager of industry analysis Paul Waatti said.
In a survey by car-shopping website Autotrader this year, buyers and car dealers both rated “creature comforts” like heated and ventilated seats No. 1 among “factors when thinking about your next vehicle.”
Another trip to the dealer
On top of that, vehicles with the features command higher resale prices, pointed out Marcus Hudson of financial consultant Calderone Advisory Group in Birmingham.
GM will now sell vehicles with the hardware for the features and pay its dealers to install the chips when they’re available. There will be no cost to customers, but a trip back to the dealership with a new vehicle isn't ideal.
“Customers don’t like going to the dealership to buy cars,” Hudson said. “Why in God’s name would they be inconvenienced to add features that should have been there in the first place?
“If I’m Ford or Toyota or Chrysler, I put everything I have in trucks and SUVs right now and harp on GM’s inability to (match) my functionality.”
They’d be fools not to. Some of the affected vehicles – particularly large SUVs and pickups – are in lucrative vehicle segments where GMC, Chevy and Cadillac are leaders. Chances to snake those prize buyers away don’t come along every day. Every lost sale is particularly painful in the current market, with new cars selling above sticker price – largely because of tight supply because of parts shortages stemming from the global pandemic.
Still, GM’s making lemons out of lemonade, potentially to the tune of thousands of sales and hundreds of millions of dollars.
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No chips, no cars
Computer chips are about the size of a fingernail, but you can’t build a modern car without thousands of them. Shortages born of COVID-19 have shut down auto assembly plants all over the world.
Some GM plants closed for months this year as the automaker allocated what chips it could get to the ones building its most profitable vehicles – mostly pickups and big SUVs.
No other major automaker selling vehicles in the U.S. has eliminated heated or ventilated seats or heated steering wheels, but nearly all have been affected by the chip shortage:
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Ford parked thousands of unfinished vehicles in storage lots for weeks or months until chips became available.
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BMW stopped offering touch screens in many vehicles.
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Nissan dropped navigation systems from many models.
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Mercedes lost LED lights and premium audio.
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Toyota lost 40% of its planned global production in August and September.
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Chrysler just laid off 300 in Indiana because it can’t get chips for automatic transmissions.
GM dropped other significant features earlier this year, including blind spot alert, fuel-saving cylinder deactivation and its revolutionary Super Cruise hands-free driving assistant. Most are available again now.
“GM has managed to navigate the chip shortage fairly well until this point,” Waatti said.
Chips aren’t only involved in obviously advanced features. They regulate everything from audio systems to cabin temperature – even the ignition buttons and smart key fobs that start and unlock vehicles.
There is no auto industry without computer chips. That’s part of the reason the U.S. government is looking at incentives to make more in the United States. Most production is currently located in Asia. When sales screeched to a halt in early 2020 and most automakers canceled parts orders, consumer electronics makers and other industries swooped in and gobbled up the suddenly available manufacturing capacity.
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GM won’t say how much paying dealerships to retrofit the chips will cost, but there’s no doubt it’s less than what the automaker stood to lose.
“The chip shortage is likely to last well into next year at the very least,” Consumer Reports’ Benjamin Preston said. “What that means for consumers is that there will be new cars that don't have the features they want. Whether or not it will be a deal breaker depends upon who is shopping, and for what vehicle.
“The one area where the chip shortage shouldn't have much of an impact is advanced safety features.”
This article originally appeared on Detroit Free Press: GM tells dealers there will be heated seats in more 2022 vehicles
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