GM to dealers: More models will be equipped with heated seats in 2022

2021-12-16 07:36:20 By : Ms. Alan Lau

General Motors took out a multimillion-dollar rabbit from its hat on Friday, telling dealers that it had found a way to restore two popular features on its vehicles. This move may prevent some of Cadillac, Chevrolet, Buick and GMC's most loyal and wealthy buyers from turning to other automakers.

Starting in the first half of 2022, due to the lack of computer chips to control them, the automaker’s dealers will be able to activate heated and ventilated front seats on vehicles without these features.

GM initially stated that the shortage would prevent it from providing popular features on most of its cars in 2022. It plans to save a limited supply of chips for the most expensive and profitable models. General Motors is making cars without chips.

General Motors now expects to have enough chips for dealers to begin retrofitting them at the end of the second quarter of 2022 to make these features available.

The heated steering wheel is another popular feature, and it is not part of the plan. They are still unavailable on most of the 2022 model year.

According to AutoPacific, a product planning consultant, heated seats are the customer's favorite choice. Their absence may push Chevrolet, Cadillac, GMC and Buick customers to other brands.

"Years ago, heated/ventilated seats and heated steering wheels were considered benefits, but today's buyers increasingly consider them non-negotiable," said Paul Waatti, AutoPacific's industry analysis manager.

In a survey of this year's auto shopping site Autotrader, buyers and auto dealers both listed heated and ventilated seats and other "biological comfort" as one of the "factors for considering the next car."

Marcus Hudson of Calderone Advisory Group, a Birmingham financial adviser, points out that the most important thing is that vehicles with these features are more expensive to resell.

General Motors will now sell cars with these functional hardware and pay dealers for installation when the chips are available. The customer does not have to pay any fees, but returning to the dealership with the new car is not ideal.

"Customers don't like going to dealers to buy cars," Hudson said. "In the name of God, why would it be inconvenient for them to add functions that should exist?

"If I were a Ford, Toyota or Chrysler, I would now put everything I own on trucks and SUVs and complain that General Motors can't (match) my functions."

If they don't, they are fools. Some of the affected vehicles—especially large SUVs and pickups—are in the lucrative automotive sector, with GMC, Chevrolet and Cadillac being the leaders. The opportunity to take away those prize buyers does not appear every day. In the current market, every loss of sales is particularly painful, and the price of a new car is higher than the list price-mainly because of the shortage of parts caused by the global pandemic and tight supply.

Nevertheless, General Motors still uses lemonade to produce lemons, and sales may reach thousands, worth hundreds of millions of dollars.

More: Dealers' reaction to GM's removal of heated seats and steering wheels

More: General Motors wants to source future chips from North American suppliers

A computer chip is about the size of a fingernail, but without thousands of chips, you cannot build a modern car. The shortage caused by COVID-19 has closed automobile assembly plants around the world.

Some of GM’s factories were closed for several months this year because the automaker allocated the chips it could obtain to the most profitable cars—mainly pickup trucks and large SUVs.

No other major automaker selling cars in the United States has eliminated heated or ventilated seats or heated steering wheels, but almost all automakers are affected by the shortage of chips:

GM dropped other important features earlier this year, including blind spot alerts, fuel-saving cylinder deactivation and its revolutionary Super Cruise hands-free driving assistant. Most are now available again.

"So far, General Motors has successfully solved the problem of chip shortages," Vatti said.

Chips are not only involved in obvious advanced functions. They regulate everything from the audio system to the temperature in the car-even the ignition button and smart keys that start and unlock the car.

Without computer chips, there would be no automobile industry. This is part of the reason why the US government is looking for incentives to make more products in the United States. Most production is currently located in Asia. When sales came to an abrupt halt in early 2020 and most automakers cancelled orders for parts, consumer electronics manufacturers and other industries swarmed in and swallowed up suddenly available manufacturing capacity.

General Motors will not disclose how much it will pay dealers to modify the chip, but there is no doubt that this is less than the loss suffered by the automaker.

"The chip shortage will last until at least next year," said Benjamin Preston of Consumer Reports. "For consumers, this means that there will be new cars that do not have the features they want. Whether it will become a deal-breaker depends on who is shopping and what vehicle they are buying.

"One area where chip shortages shouldn't have much impact is advanced security features."