Date:              April 24, 2007

To:                  All General Motors Dealers, Saturn Retailers, &
        General Motors VSSM Employees
       
From:             William E. Powell
GMNA Vice President, Industry-Dealer Affairs
                       
Subject:          GM POLICIES ON VEHICLE EXPORT, IMPORT AND SALE FOR                 RESALE  (BULLETIN 07-08)

               
This letter is to remind all GM Dealers and Saturn Retailers (herein after “Dealers”) in the U.S. that they are only authorized to sell new Motor Vehicles to customers located in the United States.  Article 5.1.2 of the GM Dealer Sales and Service Agreement (Article 12 of Saturn Retailer Agreement) states:

“Dealer located in the United States is authorized to sell new Motor Vehicles only to customers located in the United States .  Dealer agrees that it will not sell new Motor Vehicles for resale or principal use outside the United States . Dealer also agrees not to sell any new Motor Vehicles which were not originally manufactured for sale and distribution in the United States .”

Article 5.1.3 contains a comparable provision for GM dealers in Puerto Rico and the Virgin Islands .

Dealers selling new Motor Vehicles to customers, dealers, or registered importers for principal use or resale into Canada or other countries are violating the Dealer Agreement.  Dealers are expected to make reasonable inquiries of their customers to ensure compliance with dealers' obligations set forth above. A list of questions that each dealership should consider asking as part of its due diligence inquiry is attached.  Dealers in Canada and Mexico have similar limitations and obligations for new motor vehicles sold in their respective countries.

Please remember that GM and General Motors of Canada Limited (“GMCL”) have an identical policy stating that vehicles from another country are not eligible for warranty coverage until after the vehicle has been in service for six (6) months from the date of delivery AND has accumulated 7500 miles (12,000 km).  Those vehicles also must have an odometer conversion by an authorized Electronic Service Center to reflect the countries correct measurement reading of miles or kilometers.  Authorized Service Centers are listed in the GM Service Policies and Procedure Manual Article 1.5.9.  The exception is for a customer who is a tourist or on business in either country.  In these cases, the dealer must determine eligibility via GMVIS and by verifying the vehicle's registration or driver's license.  Tourists and business travelers are entitled to full warranty coverage that is applicable to their vehicle.

Dealers found to be violating Article 5.1.2 of the Dealer Agreement and GM's policies are subject to a review of their current allocation and are subject to a potential adjustment of the Motor Vehicles being allocated to their dealerships.  GM will debit back any rebate, refund, credit, incentive, allowance, discount or payment of any kind by GM with respect to any vehicle sold in violation of the Dealer Agreement and GM's policies.  GM also reserves the right to enforce the terms of the Dealer Agreement, including possible termination of the Dealer Agreement.

GMCL is advising our US GM Warranty Operations Department when motor vehicles with U.S. VINs show up in Canada .  We also need your support, and request your cooperation regarding this important topic.  

In addition, please remember that Sale for Resale (other than dealer trades between same line-make dealers in the U.S. ) is strictly prohibited.  Article 5.1.4 provides in part:

It is General Motors policy not to sell or allocate new Motor Vehicles to dealers for resale to persons or parties (or their agents) engaged in the business of reselling, brokering (including but not limited to buying services) or wholesaling Motor Vehicles.

The Dealer Agreement only authorizes dealer to purchase new Motor Vehicles for resale to customers for their personal or primary business use other than resale.  The same sanctions listed above apply to this unauthorized activity.

Thank you for your support of these important policies.  Any questions should be directed to your Zone Manager.  


                                General Motors Corporation


                                William E. Powell
                                GMNA Vice President Industry-Dealer Affairs
                                NA Vehicle Sales, Service, and Marketing