GM to End Its Employee-Discount Incentive

[ScottY]

DETROIT - General Motors Corp. plans to end next week its highly successful discount program that allowed customers to buy GM vehicles at the price employees pay, a company spokeswoman said Wednesday. The deal fueled a huge surge in GM sales in June and rivals Ford and Chrysler offered similar plans this month.

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[jfschultz]

<div class='quotetop'>QUOTE(ScottY\";p=\"110743)</div>

DETROIT - General Motors Corp. plans to end next week its highly successful discount program that allowed customers to buy GM vehicles at the price employees pay, a company spokeswoman said Wednesday. The deal fueled a huge surge in GM sales in June and rivals Ford and Chrysler offered similar plans this month.

Full Article[/b]

I'd say good ridance! From what I saw of the advertised MSRP and employee prices the big reduction was on their BIG vehicles. The reduction on the smaller cars was probably less than could be obtained by negotiating the MSRP down.

[DaveinOlyWA]

well i was wrong... guess you can give em away

[TonyPSchaefer]

And now that the prices are back up, are the sales going to drop again. Really, what's the big deal about a sale that causes a temporary surge in sales. All this means is that those people who wanted a car cheap got one. Now they have to figure out how to sell their normal-priced cars to those people who don't want one.

Who thought of this plan, anyway? Once you replace your car or buy a new one, you're most likely not going to buy a new one for at least a few years. This means that people will not be buying another GM car for at least a few years from now. And after a few more recalls, they won't be buying another GM car at all.

UNLESS. . . .
GMAC - the only GM division currently making a profit - probably got a lot more financing out of the deal.

[dieseldave]

I was researching the Prius and found this site. Hello everyone.

The reason behind the GM program and the results may be more complex than some may think.

Benefit 1. You sell a huge amount of inventory which allows you to build another huge amount of inventory. GM makes their money when the vehicle is shipped to the dealer.

Benefit 2. Beside getting loyal GM buyers you also penetrate the competitions market, especially by being the first to offer the program. Lot's of Toyota's, Honda's, and Nissan owners took advantage of the pricing. Bottom line, you pick up market share.

Benefit 3. The more vehicles you sell the more of, "Keeping up with the Jones" takes place. When the neighbor drives a Tahoe there's a better chance of me/you buying a Tahoe.

As far as buying one cheaper by negotiating a non-employee price. I have been at a Chevy store the last 9 years and this is the lowest price I have ever seen. The discount is small on the cheaper stuff because the markup is low on the cheap stuff. There is not much negotiating room on the less expensive vehicle because there’s not much to negotiate with.

I'm not looking for a fight. I like the Prius and every other Hybrid or EV and any manufacture pursing either one but...As far as "And after a few more recalls, they won't be buying another GM car at all. " I must defend GM a little by posting this factoid. The worst vehicle GM produces, according to consumers, is the Pontiac Vibe which is assembled by Toyota with many Toyota parts.

First post bomb, I'm running for cover. Seriously, I wish GM would get it in gear, more like Toyota and Honda and build a real Hybrid and another real EV like the EV1 from the late nineties.

[NuShrike]

GM needed to dump inventory because supposedly they got something like ~80 weeks of it stretching all the way back to the material suppliers.

That's something like over a year of metal and finished parts just waiting to be used, which explains them idling factories now. Imagine all the rusting, and settling before it's even used and/or assembled into a vehicle.

OTOH, Toyota supposedly has something like ~16? hours of inventory in their supply chain.

[dieseldave]

Not 80 weeks anymore. My store is in the top 100 with Chevrolet and we hardly have any 2005's left because of the Employee program and we certainly aren't alone. A 41% increase in sales for June over June 04. Toyota was up 14%. I expect to see another huge upswing, not 41% again, but big in July's numbers.

It does nothing to help the bottom line in the short term but the long term could see big benefits.

[IsrAmeriPrius]

The worst vehicle GM produces, according to consumers, is the Pontiac Vibe which is assembled by Toyota with many Toyota parts.

I wonder what your source for that information is.

According to the April 2005 edition of Consumer Reports, The Pontiac Vibe's predicted reliability is better than average. The 03 model's individual components and systems all rated much better than average with the exception of the electrical system and body hardware which were rated better than average and body integrity which rated average. The 04 model had all systems and components rated much better than average with the exception body hardware and body integrity which were rated better than average.

The Vibe's mechanical twin, the Toyota Matrix had similar, but slightly better ratings.

Perhaps the traditional (and rapidly dwindling in numbers) GM buyers are resistant to change.

[jayman]

It does nothing to help the bottom line in the short term but the long term could see big benefits.

Actually, I think that would be opposite. In the short term they move their chronic over-inventory, but then have to take another write-down long term.

Reminds me of the finance games that GMAC plays with their customer. You see the "0.0%" or "0.9%" in big letters, but the *true* finance cost is built into the vehicle. Usually on the popular Asian cars they expect you to pay the "real" finance costs.

I special ordered a 2000 GMC Sierra SLT 4x4, and when the sales guy priced it for financing he only knocked off around $1,500 on a $44,000 Cdn truck.

I took out my checkbook, told him I was paying for it outright, and started filling it out. He then knocked off $5,000 instead. What a scam.

[dieseldave]

[quote]

The worst vehicle GM produces, according to consumers, is the Pontiac Vibe which is assembled by Toyota with many Toyota parts.

I wonder what your source for that information is.

According to the April 2005 edition of Consumer Reports, The Pontiac Vibe's predicted reliability is better than average. The 03 model's individual components and systems all rated much better than average with the exception of the electrical system and body hardware which were rated better than average and body integrity which rated average. The 04 model had all systems and components rated much better than average with the exception body hardware and body integrity which were rated better than average.



The Vibe's mechanical twin, the Toyota Matrix had similar, but slightly better ratings.

Perhaps the traditional (and rapidly dwindling in numbers) GM buyers are resistant to change.

That's one possibility or perhaps they’ve come to expect more from GM than what the traditional Toyota customer deems as quality.

My info. comes from JD Power initial quality survey for 2005 vehicles which I believe is based on customer responses and not opinion or single unit testing. I must admit the Vibe tied for last with Cavalier. You want to do some interesting research go to JD Powers and research 2002 models. They have the 3-year responses and ratings on those vehicles. The 3 year test indicate to me (I admit to bias) that GM is closing the gap. They are not closing the gap in perceived quality but they are in actual quality.

Yep, GM's dwindling numbers is right and they need to turn that trend around or it won't be long before GM only sells 3 vehicles to every 1 Toyota sells.

We all suffer a bias for what we like. What we each perceive as value is often so different from reality it's downright funny and I include myself in that lunacy.