GM will cap gas prices for buyers.

<div class='quotetop'>QUOTE(burritos @ May 24 2006, 05:15 PM) [snapback]260629[/snapback]</div>

It doesn't seem like they're monitoring your gas consumption but rather the distance traveled via Onstar. They could also verify it the distance traveled by looking periodic position reports from the car. Keep in mind the part of the Onstar system is a built in GPS receiver.

 

<div class='quotetop'>QUOTE(burritos @ May 24 2006, 07:15 PM) [snapback]260629[/snapback]</div>

(Miles driven on actual vehicle as reported by OnStar in a month) divided by (EPA mileage estimate) = #gallons

Reimbursement = [ (Your state's avg. price per gallon... of regular.) minus $1.99 ] X #gallons

Assumptions:
1. Your super-sucker GM vehicle actually gets its EPA rated mileage (yeah right)
2. You pay at or less than your state's avg. gas price
3. You fill up with regular*

If you siphon the gas out, it doesn't matter because you only get reimbursed for mileage; GM never sees how much you're actually paying or how much gas you use. Now... get a Prius to spin the GM vehicle's drive wheels in neutral (to increment the ODO)... that *might* work.

* I'm assuming GM only caps the price of regular unleaded... who here thinks they'd cover the extra cost of premium?

 

<div class='quotetop'>QUOTE(slortz @ May 24 2006, 04:54 PM) [snapback]260602[/snapback]</div>

Uhh, if you didn't know GM's GMAC IS a mortgage lender (http://www.gmacmortgage.com/). GMAC's profits are helping prop up its ailing North American auto division.

http://phx.corporate-ir.net/phoenix.zhtml?...p=irol-earnings

 

<div class='quotetop'>QUOTE(wrprice @ May 24 2006, 10:33 PM) [snapback]260775[/snapback]</div>

This sounds like the reverse of the proposed GPS-based gas tax of Oregon. Instead of taxing you on distance driven, you get paid for it.

Sneaky way of testing the idea in the field maybe?

 

<div class='quotetop'>QUOTE(Godiva @ May 23 2006, 10:07 PM) [snapback]260054[/snapback]</div>

Sounds like a genius marketing plan at the cost of the Economy.

On one hand, this sounds like a spectacular deal to the mathematically-challenged consumer (I think most SUV customers fall into this category anyway), who looks at this as a way of justifying the gas-guzzler purchase they want so badly.

As others have stated, GM will track this by GPS and EPA rating. Firstly, the way most SUV drivers seem to drive, there is no way they will get EPA. Secondly, this requires Onstar - which is $17/month after the first freebie year. In addition, they will just take the money from somewhere else, like not offering as much discount at purchase. They won't be losing anything.

This sounds a lot like the promo that GM is running in Canada - buy certain models, and "GM will give you $0.20 off per litre, up to 2500L". Sounds great, until you realize it is really only $500... but it sure sounds good when you say "we'll give you lower gas prices!", which is really the sore spot these days with consumers.

Now, what could really turn into a jackpot for GM with this is if prices do go through the roof in a year or two's time, all the consumers who bought these guzzlers because they figured this promo allowed them to afford the vehicle (!) will realize the gas is killing them and look to trade them for something more efficient. Resale should be pretty sad in that economics (though with SUV sales soaring now anyway, who knows?), they will likely just trade and buy a Cobalt or something. Another sale for GM.

Bottom line is that this seems like a pretty clever marketing scheme like the "Employee plan" deal, only this will put more inefficient vehicles on the road which will consume more gas, drive the prices up further, and ultimately hurt the economy, which is bad.

GM looking to increase their bottom line, no matter what the cost to society... <_<

- Kevin

 

So, if I load my Tahoe on the Auto-Train and ship it to Fla I can get reimbursed for the mileage?

Hmm.

 

<div class='quotetop'>QUOTE(cwerdna @ May 25 2006, 12:41 AM) [snapback]260779[/snapback]</div>

I didn't know that this gas cap promotion was through GMAC. I had heard that GM inked a deal to sell GMAC.
Looking at it again, I shouldn't criticize GM for this. I guess this is no different than a 0% financing for the first year deal. I guess shortsighted gotta-have-it-now people would fall for either one and they only have themselves to blame if they can't afford it later. Do the math people and plan it out! ...or at least don't complain after that first year is up, gas is at $4/gal., and it costs a small mortgage payment to fill up each month.

 

Major short-term thinking. Makes no sense, short- or long-term, to pay people to purchase your products. A rational decision is to build a better product, as in Toyota.

 

There may be one way to beat the system. NPR had a piece on about a few gas stations who are selling as much gas as you want at the current market price. You could get 6mo. 1 -2 or more years worth biased on your usual consumption rate. You then gas up until you have used up your purchase. The dealer buys gas futures and supplies the gas. Apparently there are a few people that bought in at under $2 and down that are sitting quite pretty right now. Interesting idea. When I first read the original post I wondered if GM had done the same thing, but as I read the article I saw that it could not be the case.

 

<div class='quotetop'>QUOTE(NuShrike @ May 25 2006, 01:26 AM) [snapback]260816[/snapback]</div>

don't even joke about that, I will start the revolution which overthrows the government if they try that in California. Oregon.. meh.. I dont care about Oregon.

 

<div class='quotetop'>QUOTE(MikeSF @ May 25 2006, 04:53 PM) [snapback]261091[/snapback]</div>

I am guessing it will not happen in Oregon either. It is a regressive idea and for the most part Oregon has been a Progressive State. I would stay informed about the possibility of them adding universal medical care about a year before the next presidential election.

 

exactly what i would expect from gm

 

<div class='quotetop'>QUOTE(tripp @ May 23 2006, 11:40 PM) [snapback]260165[/snapback]</div>

GM should have given the free gas to all the GM employees they just laid off!

They've tried everything except make vehicles that get good gas mileage so people will buy them.

What's next, a free Green Card if you buy a GM vehicle???

 

<div class='quotetop'>QUOTE(skruse @ May 25 2006, 11:37 AM) [snapback]260900[/snapback]</div>

That's not completely true. Remember that it's rumored each Prius costs Toyota around $35k to build. If accurate, Toyota hasn't exactly been making money on the Prius. I view the reason Toyota prices the Prius option packages outrageously as an effort to recoup some of the loss. Still, they're losing money on even a fully loaded package 8 Prius.

You can't make money (short-term, anyway) by selling a product, no matter how good, for less than what it costs to make. The difference between GM and Toyota is that Toyota has a long-term strategy for vehicles that lose money in the short-term. Even though they might be losing money on the Prius now, you can bet Toyota has it figured out that at some point down the road, those losses will turn around into some huge, long-term profits, primarily in market-share gains. This is a tried-and-true Japanese business practice (similiar to 'dumping'), pioneered by Sony when they would sell television sets for less than it cost them to make and wiped-out the American television manufacturing industry. The difference is that there is no domestic rival of the Prius for Toyota to run out of business.

There is no domestic Prius rival because it's doubtful any American auto manufacturer could afford to either sell a Prius-equivalent at a Prius price, nor could they afford to take the loss over the same time frame that the Prius has currently been in production.

Instead, GM (like Ford) seems to be in a constant crisis management mode, year after year. They panic at the end of the model year and come up with financial gimmicks to unload excess inventory of vehicles that very few people seem to want and anyone with any mathematical skill know are losers in every sense. DC is the only manufacturer that seems to have the most accurate foresight in product planning of the domestics (which isn't really saying much).

 

<div class='quotetop'>QUOTE(rudiger @ May 26 2006, 12:15 PM) [snapback]261434[/snapback]</div>

and why are you helping to spread this completely false rumor?

 

<div class='quotetop'>QUOTE(rudiger @ May 26 2006, 12:15 PM) [snapback]261434[/snapback]</div>

What's your sources? No, I don't "remember".

Considering that Toyota has been building Priuses for almost 10 years now, and the same HSD parts goes into the other newer HSD vehicles, it's easier to see that they should be making a profit off each Prius.

Why would Toyota need to price the option packages outrageously if Toyota is already loosing money on each Prius sold? Wouldn't that imply they would loose more money on the lower/base models, so why even bother selling those? And, what auto maker doesn't price options/parts outrageously? I see $130 for a hatch slide-cover for the Fit.. looks like a $50 part to me.

I note in this article that it says a Chinese Prius will cost $35K to $40K, but cost to whom? Looking lower, it says the Chinese Prius will be priced between 288,000 yuan and 302000 yuan which translates to $35K USD to $37639 USD so close enough, and nothing about the actual costs for Toyota.

 

rudiger: the notion that Toyota sold Priuses at a loss was laid to rest to the satisfaction of most of us in about 2002. Yes, they have a slimmer profit margin than other Toyota cars, and yes, if the car had failed in the NA market, Toyota would have taken a big net loss. But that's ancient history. Check your sources.

In our paper today (Friday's papers everywhere are thick with dealer car ads, even separate sections just for car ads), a local GM dealer is running a full-pager on the gas promotion (plus "as low as" 0% financing). I wish I had time to go hang out at a dealer and see (and listen to) people who are swept up in this promotion.

 

The fuel rebate runs through 2007, and requires the lame 'onstar' subscription after a free trial period.

I don't see this as being that much of a money incentive.

It does remind me of ARM mortgages. Fixed for a while, and then whammo.

 

<div class='quotetop'>QUOTE(EricGo @ May 26 2006, 04:05 PM) [snapback]261518[/snapback]</div>

The program is good for the first year of ownership. Onstar comes free for the first year. I don't see any requirement that you must continue to subscribe after the year is up.

 

The 'brain trust' at GM has impeccable timing. On a Memorial Day weekend when we are embroiled in a war to secure Middle East oil, they announce a marketing plan that allows their company to unload even more gas guzzlers, thereby increasing the demand for oil, strengthening the hand of Saudi Arabia, Iran, Shell, and Exxon, and making it clear to all that you do not give a s--t about anyone's sacrifice. Such partrotism.