GM lets everyone in on its discount All buyers can have the same deal that its employees get May 28, 2005 BY MICHAEL ELLIS FREE PRESS BUSINESS WRITER General Motors Corp., hoping to clear dealer lots of growing numbers of unsold models, is trying yet another tactic to drum up sales. GM will announce Wednesday that it will offer all buyers the same discount that employees get, giving consumers nationwide thousands of dollars off the price of every 2005 car or truck except the Chevrolet Corvette, a person familiar with the plan said Friday. The employee discount varies by model. The new program, to be unveiled publicly the same day that GM is expected to report another weak month of U.S. auto sales, could help trim high inventories of cars and trucks. That particularly means full-size pickups and sport utility vehicles, sales of which have suffered due to record high gasoline prices, dealers said. Weakening sales for GM's aging truck lineup, including its most profitable models, were a major reason why GM posted a $1.1 billion loss in the first quarter, its worst result since 1992. Dealers contacted by the Free Press said they would welcome the program. "If that's what they're doing, I think that's great," Lynn Thompson, co-owner of Thompson Pontiac-GMC-Cadillac-Saab in Springfield, Mo., told the Free Press in a telephone interview. "I'm not selling as many as I need to," he said about GM's large SUVs. A GM official declined to comment. With gasoline prices hovering at around $2 a gallon and GM's truck lineup several years older than competitors' models, many of GM's most profitable vehicles sit unsold at dealerships. Dealers have enough supply of the Cadillac Escalade SUV, once one of its hottest models, to last 139 days at the current selling rate, according to Ward's Automotive Reports. GM's preferred rate would be about a 70 to 80 day supply. The days' supply is even higher for some other models, such as the Pontiac Montana SV6 minivan, the Chevrolet Avalanche pickup truck and the GMC Yukon XL SUV. "GM still has to clear excess inventories, particularly of their trucks. The new incentives suggest that sales were soft in May," said David Healy, an automotive analyst with Burnham Securities, which manages mutual funds and large individual investors. One reason GM may be anxious to move out the older trucks is to make room for a new generation of large pickups and SUVs, code-named GMT-900, expected to hit dealerships early next year. GM executives have said in recent months that they hope to back away from offering large incentives on their vehicles, which analysts said has weakened the strength of some GM brands and hurt the trade-in value of GM vehicles. Over the last two months, GM's Hot Button Event promotion gave consumers the chance to win one of 1,000 GM cars and trucks when they visited a dealership. For the many consumers who didn't win a vehicle, GM also offered a $1,000 cash bonus applied to the purchase or lease of a new 2004 or 2005 model year GM car or truck. "It's driven a lot of traffic in, but I haven't sold a lot of cars off it," Thompson said. With the new program, GM appears to be returning to the tried and true model of keeping incentive programs simple and compelling, the same formula that helped spark sales shortly after the Sept. 11 attacks. "I think maybe some buyers have been turned off by fairly complicated incentives, where there are five or six options," Healy said. "Maybe it's a K.I.S.S. program ... Keep It Simple Stupid." Last November, with interest rates on the rise, GM unveiled its Lock 'n Roll promotion, offering consumers the chance to lock in a low financing rate on both a new vehicle and a second GM vehicle in a few years. But dealers said the offer was too complicated, and GM officials acknowledged it failed to meet expectations. GM's U.S. sales are expected to drop about 5.7 percent in May, according to Ward's. Through the first four months of the year, GM's sales dropped nearly 5 percent. Even as sales have dropped, GM has favored cutting inventories by temporarily shutting its plants in tandem with its incentive spending, according to a report issued this week by John Casesa, who studies the auto industry for investors at the brokerage Merrill Lynch. "Market-share losses, however, continue to undermine GM's efforts to get its house in order, and year-over-year declines in production will likely be the norm through the end of this year, until GMT-900 production begins to ramp up," Casesa said. Contact MICHAEL ELLIS at 313-222-8784 or mellis@freepress.com. PS, this is basically the best deal you can get, dealers still make a little profit about $500 per, employee price is dealer invoice, usually. Don't let them haggle you to 'their' price, ask for the invoice.
It'll be a cold day in hell before I EVER buy another GM vehicle. I've NEVER bought a new one. In fact, I've never owned a GM vehicle newer than 1969 and don't ever plan to. GM is a bank any more. NOT an engineering firm or real vehicle manufacturer.
i want a 3500 series, four door, four wheel drive, LWB, duramax diesel dualie. how much do i need, about $50,000.00 ?
Yardley, well My Parent's never owned a new GM vehicle til 1971, all they ever bought were used Buicks, until the five of us kids didn't fit in the '64 Electra, bought used, they bought a new '71 Oldsmobile Custom Cruiser, 455 2bbl, with no AC! Since then and my brother and I work for GM, we get a discount, Mom has had a few new cars, '81 Skylark 4door, totaled in Canada, 4/82,'82 LeSabre 4-dr, '85 Riv and '95 Riv, Next new one, well I'm not sure what it will be, the '95 Riv only has less than 70K, so she may keep it forever, the 'Creampuff' RV
Henry, I don't think so, Go to http://www.gmbuypower.com find the truck you want, and email me the info, dealer, etc, and I can get the employee price info for you. I'm thinking around $38K, but just guessing. R
Let me get this straight. GM is having trouble selling trucks and SUV's, so they go and build a whole new lineup of trucks and SUV's?
It's nuts! :rant: I read recently that they are going to concentrate on Chevy & Cadillac. The other brands will be niche vehicles. Sounds pretty boring to me.
Call the code cart for GM Buicks Velite is one very sharp car one that would at least bring me into the showroom for a test drive. But in their infinite wisdon it has been put on hold until o No: My next GS is being built by Lexus. Try one before you flame me.
I bought my wife an RX330 Lexus this time. I can tell you, her next car WILL be a GS Lexus, hands down. Incredible reliability and build quality, phenominal dealer service (FREE door-door pick up and deliver for oil change service, and a FREE loaner ?) I also bought 2 Toyota Tundra's for shop service/delivery trucks, the BEST trucks I have bought yet, not a whimper, or rattle, or squeak. There, I said it. Jim
hummer's look kinda tough, & i'm told they do well in snow, but you ever looked at the tie rods in those things ? they are tiny, looks kinda weak to me. the soccer moms around here love those things. Roberta, i thank you for the offer, but i dont think i can swing it right now. heart surgery is very expensive these days.
Roberta how much less is dealer invoice from msrp, I am tring to figure out if I can swing a new 2500hd with the diesel about 35000 msrp. Thanks Herb
Hummer H2 tie rods? ou: http://www.big-boys.com/articles/badhummer.html I'll stick with my 'burban :TU: D.
Roberta I looked at the 2005 Z71 LTs today and yesterday at two different dealerships thinking it was going to be a good deal. The problem is that they were trying to either make up profit on the trade end or all the incentives have killed the trade in values or both The bottom line was too much diffential was required in exchange for our existing Z71.
Jim, I would think the incentives have killed the trade in value. My 2004 GMC Sierra Duramax Crew Cab, stickered at $48K as a company car, major discount with 7500 miles, with the incentives, including a GMAC $1000 for financing with them, was out the door for less than retail, around $33K! I could make money on it if I was to sell, cause there still seems to be a market for the Duramax. John Stevens said they can't keep them on the used car lot at his dealership in Indiana, even though the price of diesel fuel is sometimes more than regular gas. Last year to BG, spent $150 in fuel this year with the same truck was over $200! My new job is only 3 miles from home, so I am thinking that I will keep the '04 for a while, I was driving 500 miles a week to Pontiac, and made for a quick mileage on a company car deal, but no more. The car/truck market is major weird right now, find the right dealership and they will deal and others won't, story of life, I guess. RV
Herb, MSRP = some mythical number that is dropped from the heavens by GM pricing gods! Dealer invoice = another mythical number used to fool consumers into thinking what the dealer pays. What you want to know is the actual cost for the vehicle and that is not published anywhere. The dealer gets all kinds of GM "money" for the vehicle sales, including but not limited to: dealer "hold back/kickback", advertising/marketing dollars, dealer performance rewards for the month, quarter and year, etc. Henry, if you want a better deal on Duramax, look at some on www.ebay.com Let someone else take the 2-3 year depreciation hit. :TU:
