GM's New Lure

Oh this will do wonders for the value of GM cars in the coming years - hopefully, they can follow up these prices with quality and exceptional customer service. This article is not meant to relive the S&M thread - just to show there is another initiative coming up the pike.

Now, if all this fails, you'll see that its not the price that matters and that consumers aren't easily fooled.

I like the last line :lol:

Link to Article

GM's new lure: Everyday low prices

Knight Ridder - Knight Ridder - Friday, January 13, 2006

Knight Ridder Newspapers

By Matt Nauman

DETROIT _ At the last minute, General Motors deflated the artificial balloon of good feeling generated by three days of products introductions at the North American International Auto Show.

With wacky concepts and plenty of ready-for-prime-time metal, the Detroit auto show is the nation's most significant. This year's event attracted 6,800 reporters and even the first Chinese automaker willing to test the American waters.

But, just as the press preview days were getting ready to end, GM executives brought everyone back to reality. They talked about prices.

They weren't the only ones.

_The new Dodge Caliber, a wagonlike rival to the Pontiac Vibe and Toyota Matrix, will sell for $13,985, including destination charge. "I've spent more on my dates at Bennigan's," joked comic actor David Spade, who took part in the Caliber intro. It goes on sale soon, maybe before the end of the month.

_The new Mazda CX-7, one of the multitude of crossover utilities at the show, will start at $24,310 for the two-wheel-drive version. It goes on sale in the spring, and the price includes the destination charge.

_The new Jaguar XK coupe will sell for $75,500. The convertible XK will go for $81,500. I don't know when it goes on sale, and I don't know if the price includes the destination charge.

But GM trumped them all. It announced that it would make a major effort to end the incentives wars that it began in 2001 shortly after the Sept. 11 tragedy.

So, Tuesday, it cut the manufacturer's suggested retail price (MSRP) on 56 of its 77 models, or for about 80 percent of its volume. Cuts range from a few hundred dollars to about $2,500. That meant reprinting 1 million vehicle window stickers.

GM Chairman Rick Wagoner, in a scrum of tape-recorder and TV-camera-wielding reporters, deflected a suggestion that this was a desperate move.

"We think this is going to call attention that you can buy another product, but if you do you're paying more than you need to," Wagoner said.

Mark LaNeve, GM's vice president for North American vehicle sales, service and marketing, was animated as he discussed the plan with reporters.

Massive incentives, he said, are "just not a good way to run our business. This isn't a promotional program. It's a permanent repricing."

GM gave some examples. A Chevy Cobalt coupe, a fairly new small car, used to sell for $14,490. It's now sticker priced at $12,990, much less than rivals such as a Toyota Corolla CE, Honda Civic DX and Ford Focus ZX3.

Similar patterns emerge with the Chevy Silverado pickup, the Buick LaCrosse sedan, the Pontiac G6 and the GMC Envoy SLE sport utility.

LaNeve said the move wasn't designed to boost GM's market share, which hovers near 26 percent. And it's not a moneymaking scheme, as the prices now being offered are about the same as what was available in the summer during GM's successful "employee discount" program.

But, he said, it will bring some consistency to GM. Last year, for example, during employee discounting, the auto giant had a 32 percent market share. When the program ended, its share fell to 24 percent.

Of course, many unanswered questions remain. Will U.S. car buyers, who have become so used to incentives, resist buying new vehicles without them? And, if they do, will GM cave in to falling sales and offer them anew?

According to edmunds.com, incentives were $3,456 per domestic vehicle sold and $1,109 per Japanese vehicle sold in 2005. GM paid the most, at $3,623 a vehicle.

If nothing else, this move confirms the power of the Internet. Wagoner mentioned the Web, and edmunds.com in particular, as one motivation for the change. It's also a pricing service. A buyer can go online, he said, and think GM's vehicles cost more than its rivals'. That's not true, but automotive-information Web sites often don't include incentives in their pricing information. Now, with lower sticker prices, "you can see the value," he said.

Dealers told Wagoner that GM spends too much money hyping its latest incentive program. `You guys don't have to do that," he was told. "You've got very competitive cars and trucks. Let's spend more of our money talking about that."

Here's the bottom line: For more than three years, car shoppers have been associating GM and its many brands with getting money back. In other words, why should you buy a GM car today when you can buy one tomorrow with a better deal?

GM said that's no longer going to happen. We'll see.

 

Well then, if GM really cuts those costs, would it be even better to wait until you see the result of that action on the window sticker? Can you live with getting it for 17 instead of 19? What will it be worth in 5 years?

Even if I wasn't previously burnt (bad) by domestic models, there is nothing out there that has that "WOW" factor. Really. I've been in friends new cars and felt/saw the same old thing. If they could just follow through in making those concept vehicles and not charge a nut for them (i.e. SSR). :blink: