- The dealership sued GM for inventory shortage. Sun GMC claims GM is running a shortage of cars, threatening its business.
- The allocation system puts pressure on dealers. Automakers use allocations to control dealership behavior and performance.
- There has been a huge decline in the inventory of Sun GMC. From 1,200 vehicles in 2017 to just 501 in 2025.
- Dealers face a challenging feedback loop. Low inventory leads to reduced sales, which worsens their standing with automakers.
Ground level: Sun GMC is suing GM for $15 million, claiming unfair inventory practices are hurting its business.
AI assisted, editor reviewed
Imagine you run McDonald’s. It may not be the most successful in your area, but you use enough McWhitevers to make a substantial profit and send your employees home with a paycheck every night. But gradually, you’ll notice that your warehouse has started sending you less and less burger patties and chicken goo-slabs. And who’s in charge of making sure your shake machine works? that man is not here Year. And then, when you complain to corporate that you don’t have enough food to serve your customers, they advise you to order Happy Meals from some store across town and sell them to their customers instead.
And then, when customers complain about poor quality and poor service, everyone points fingers. You. You’d probably be pretty angry, right? Maybe even crazy enough to file a lawsuit. Say, for $15 million? he is What’s a Long Island, New York, GMC Dealership Really Doing.
according to automotive newsSun GMC in Wantagh, NY claims GM is “wrongfully shorting inventory to sell, causing irreparable harm and damage to Sun’s business and goodwill,” threatening the dealer’s ability to continue operating.
GMCs aren’t cheeseburgers, admittedly, and the above is a bit of an oversimplification, but it’s not too far from reality. Yes, we complain a lot about dealers – it is our right as consumers in a capitalist economy. But if you think there is animosity between buyers and dealers, you should look at how bad things are between dealers and automakers.
See, when customers feel wronged by a dealership, they vote with their wallets by taking their business elsewhere. But dealers, like buyers, are customers in their own way; They have to buy cars to sell, and unlike us, they can’t switch to a new manufacturer if they feel they’re getting worse – and like customers, they’re pretty much the same way. Always goes bad. How? it is called allotment.
In an ideal world, automakers would read our minds, build every new car we might need in a given year, and deliver them across the country based on when/where we need them. In the real world, dealers receive allocations from an automaker’s total annual production based on that dealer’s individual performance, and once those units are allocated, the taps are turned off, no matter how large (or how vocal) your customer base is.
On paper, it’s a simple, merit-based system: If you sell more cars, you get more cars. The same is true for quality. If you sell better equipped, more expensive models, you should (theoretically, anyway) get more high-priced units like them next time. And if it were that simple in practice, everyone would probably be grudgingly satisfied with the way things work. But of course, it is not so.
Because a new car dealership franchise cannot survive without selling new cars, automakers may use the allocation system as leverage to abuse dealerships. Lots of bad experience scores or customer complaints will start adding up. Have you ever wondered why SalesDrones pay so much attention to the surveys they send out? Trust me; They may say something about your satisfaction. Five stars simply means more cars.
Or at least it should be. In the real world, automakers can use the allocation to pressure dealers to do just about anything. Is your signage outdated? Haven’t you renovated the building recently? Are your windows not clean enough, your space not completely clear of debris? You may not be following the standards set forth in your franchise contract. Rub the automaker the wrong way, and you may suddenly find yourself missing out on just what you need to stay afloat.
The dealership claims GM is doing just that with the Sun GMC. According to its lawsuit, the company received an allocation of around 1,200 vehicles in 2017; Since then this number has been decreasing. In 2025, it received only 501. When Sun complained that it did not have enough vehicles to sell, GM reportedly told dealerships to simply buy the cars from another outlet (and no doubt pass the higher costs on to the customer).
And somehow, despite selling 99% of its allotted inventory, GM still considers Sun a poorly performing dealership.
The dealership claims it has resorted to stocking used cars in the new vehicle showroom just to keep inventory on the floor. To make matters worse, the dealer’s low inventory quantity creates a feedback loop. With less cars being produced, there are less sales, further tarnishing its reputation in the corporate world.
So, next time you go to buy a car, remember, the guys and gals sitting on the other side of that uncomfortable desk are just as worried as you. That information might not save you any money, but it might make you feel a little better about your impending getaway.
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