GM's new lure: Low sticker prices Tyler Redden Article

GM calls it "value pricing," GM calls it "value pricing," The “once-in-a-lifetime” deal -- a discount plan that allows the general public to buy GM cars or trucks at the employee price. The “once-in-a-lifetime” deal -- a discount plan that allows the general public to buy GM cars or trucks at the employee price. GM wants to get people away from the concept of a big monthly deal. GM wants to get people away from the concept of a big monthly deal. what-you-see-is-what-you-get what-you-see-is-what-you-get

New Strategy Instead of high prices w/ huge incentives now car buyers get the low sticker price. Instead of high prices w/ huge incentives now car buyers get the low sticker price. Growing number of consumers who do their auto shopping on the Internet. Growing number of consumers who do their auto shopping on the Internet. GM: turn around North American operations, which lost $2.5 billion in the first half of GM: turn around North American operations, which lost $2.5 billion in the first half of 2005.

Risks - Rewards Customers are used to the monthly incentive deals. Customers are used to the monthly incentive deals. GM Employee Discount plan captured 30.3 percent of the retail new-vehicle market compared to 25 percent a year ago. GM Employee Discount plan captured 30.3 percent of the retail new-vehicle market compared to 25 percent a year ago. GM a 41% increase in its June sales GM a 41% increase in its June sales

Competitors Movements Ford and Chrysler copied the employee-discount plan. Ford and Chrysler copied the employee-discount plan. Initially GM planned to end the plan on Aug. 1st, now will continue through Sept. 6. Initially GM planned to end the plan on Aug. 1st, now will continue through Sept. 6. GM and Ford to cut 2006 prices. GM and Ford to cut 2006 prices.

Competitors Movement GM's retail sales increased 42 percent in the first 15 days of July, while Ford's jumped 27 percent and the Chrysler Group saw an 11 percent hike. GM's retail sales increased 42 percent in the first 15 days of July, while Ford's jumped 27 percent and the Chrysler Group saw an 11 percent hike. Toyota Motor, American Honda and Nissan Motor have all lost market share. Toyota Motor, American Honda and Nissan Motor have all lost market share. But, they are all still showing a sales increase But, they are all still showing a sales increase

Future impacts High sales numbers may lead to sub-par sales figures when the 2006 models are released. High sales numbers may lead to sub-par sales figures when the 2006 models are released. Prices on used vehicles may drop as discounts on new cars lead to massive amounts of trade-ins Prices on used vehicles may drop as discounts on new cars lead to massive amounts of trade-ins A used car lot had 410 used cars, up from the usual 250. A used car lot had 410 used cars, up from the usual % of new car buyers generally trade in their current vehicles. 60% of new car buyers generally trade in their current vehicles. SSR SSR SSR

Sources 8.htm 8.htm = = htm htm ?ID= ?ID=