Costco Auto’s GM EVs could help drive EV sales | Wilnesh News

Detroit- General Motors There’s a not-so-secret weapon in getting U.S. consumers to buy its new all-electric vehicles: costco wholesale.

The Detroit automaker said it is increasingly using the retail giant’s Costco Auto Program for EVs as vehicles like the Chevrolet Equinox and Chevrolet Blazer electric vehicles expand its portfolio from niche to mass-market vehicles.

The president of General Motors North America said: “We have a good cooperative relationship with Costco. I am very optimistic about Costco because I like their brand.” Marissa West told CNBC in a recent interview. “I encourage the team to look at how we can build that partnership.”

West sees electric vehicles as a “huge opportunity” to expand GM’s reach among Costco’s more than 50 million members in the United States.

Automakers such as General Motors, Ford and Volkswagen The companies have been changing their EV strategies in recent months to boost sales and achieve long-elusive auto profits. Brands have relaxed their promotion of all-electric vehicles, turning to hybrids as a bridge to adoption and establishing charging partnerships to boost consumer confidence in the market.

Intermediaries like Costco have large numbers of new car buyers and can help drive electric vehicle sales.

Costco said Costco Auto, the wholesale retailer’s third-party service, does not sell the vehicles. Instead, the retailer said, it acts as a facilitator or partner with franchised dealers and automakers like General Motors to provide Costco members with special pricing on vehicles through discounts and other incentives.

Jay Maxwell, general manager of strategic partnerships for Costco Automotive Projects, said that over the past five years, Costco Auto has facilitated an average of more than 500,000 vehicle sales per year.

As with many Costco products, this is a large amount. It accounts for at least 3% of all vehicles sold in the United States each year, more than large publicly traded dealer groups such as Lithia Automotive and automated country.

GM declined to say how many Costco customers purchased GM vehicles through the program.

Costco said that more and more cars sold through Costco Auto are electric. Maxwell said that by 2023, about 7% of member vehicle requests to Costco Auto will be related to electric vehicles.

“Our members always like new things, and electric vehicles are definitely new to the market,” Maxwell said. “It’s a great way for (automakers) to market and get their electric vehicles in front of people who are interested. Costco has a very strong audience and is perfect for electric vehicle buyers.”

In addition to General Motors, Costco Auto has also cooperated with Volvo over the years, including its new Polestar electric vehicle brand, Audi, etc.

Costco Auto partners with automakers such as General Motors to offer discounts nationwide, in addition to individual partnerships with more than 3,000 franchised dealers across the U.S. in a program it calls the “Everyday Auto” program, Costco said.

The retailer said the blanket discounts offered by the automaker can be used at any franchised dealer, or Costco will recommend a partner dealer where shoppers can work with Costco Auto-trained associates.

Maxwell said these dealerships have specially trained staff who understand all available incentives and offer market-competitive, no-haggle prices.

“It’s pre-negotiated and we work with dealers every month to make sure it’s updated and competitive in the market,” Maxwell said. “You know the price is going to be a good price because you’re buying through Costco and you can really focus on and enjoy the buying experience.”

General Motors is currently offering $1,000 worth of Equinox, Blazer and Cadillac Lyriq electric vehicle as of July. Maxwell said the discounts, which are unique to Costco, are in addition to any other company or dealer incentives.

Cox Automotive reports average transaction price electric car As of April, U.S. sales were $55,242. That’s more than $10,000 more than a gas-powered car, Cox said.

Costco member rewards typically last 60 to 90 days, and members can also receive other benefits on used cars, maintenance and service, Costco said. Participating retailers are currently offering 15% off auto repairs up to $500.

According to statistics, Costco members are mainly composed of suburban and urban families, with 58% of members aged between 42 and 59 years old. molecular. Costco members also tend to be wealthy, with 35% earning more than $125,000, 25% more than the average retailer’s shoppers, and 46% earning between $40,000 and $125,000, the market research firm reports.

Buyer age and income are both key demographic considerations for auto companies like General Motors, which are working to get more electric vehicles into the garages of American drivers.

Costco shoppers are also very loyal and prefer the retailer to many other stores, according to Kantar, a global marketing data and analytics company.

“Costco members are extremely loyal to Costco,” Julie Craig, vice president of Shopping Insights at Kantar, said in a statement. “These members feel that the savings they get through their memberships are offset by the savings they get from their memberships.” fees, and the value Costco provides them exceeds what they can get at other stores.”

Maxwell said automakers and related dealers pay Costco Auto a subscription fee primarily for marketing and advertising of their vehicles. He declined to disclose the companies’ subscription fees.

Costco auto program originally part of wholesale rival price clubmerged with Costco in 1993.

– CNBC Melissa Repko contributed to this article.