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GM's New Lure

Discussion in 'Prius, Hybrid, EV and Alt-Fuel News' started by 2Hybrids, Jan 13, 2006.

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  1. 2Hybrids

    2Hybrids New Member

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    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.
     
    #1 2Hybrids, Jan 13, 2006
  2. Rancid13

    Rancid13 Cool Chick with a Black Prius

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    :D Heh-heh-heh....:ph34r:
     
    #2 Rancid13, Jan 13, 2006
  3. hv74656

    hv74656 Member

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    Now GM has everyday low prices? I think that is a Wal-Mart slogan. It fits though, Wal-Mart quality cars, Wal-Mart prices. Next up, 80 year old greeters when you visit your local Buick dealer, oh wait, they're the CUSTOMERS. <Sorry, couldn't help myself there. :D
     
    #3 hv74656, Jan 14, 2006
  4. tag

    tag Senior Member

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    ....and if those greeters don't work, they could always try some variation of VZW's New Every Two program.
     
    #4 tag, Jan 14, 2006
  5. windstrings

    windstrings Certified Prius Breeder

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    I think they may be having a "going out of business sale?"

    If they reveal it too soon, they won't sell anything.... but they will liquidate what they can and then reveal thier bankrupt status....

    thats my guess...
     
    #5 windstrings, Jan 14, 2006
  6. fshagan

    fshagan Senior Member

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    GM won't "liquidate" in a bankruptcy. They will reorganize. There might be an effort to reduce inventories, but I don't think they have that problem (Chrysler did in the 1980's when the Government bailed them out).

    I drove a HHR 200 miles on vacation, and I've got to tell you, it was as comfortable as the Prius I have taken for a couple of test drives. Maybe more. The driver's seat is very comfortable, and the car is quiet. I was impressed. And fully loaded, the car is being bought for under $19,000. And, they are offering 2.9% financing.

    With all the games the Toyota dealers are playing, I'm seriously looking at the HHR this weekend. I may buy it instead of the Prius ... its 26 MPG combined mileage owners are actually getting is only half what the Prius gets. I would save about $780 a year on gas with the Prius if gas goes up to $3 a gallon, but my payment on an HHR would be about $852 less per year. And I would finance it for three years, instead of four. I drive a car at least twice as long as I finance it, so the HHR's total cost, even with gas at $3 a gallon, would be much less.
     
    #6 fshagan, Jan 14, 2006
  7. 2Hybrids

    2Hybrids New Member

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    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:
     
    #7 2Hybrids, Jan 14, 2006
  8. malorn

    malorn Senior Member

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    The HHR is a great vehicle. I hope you get your self one and let everyone on here know about your experience.
    GM did what they should have done months ago. They really have great products which is being diluted by all of the hype about rebates. It is time for GM to get back to selling great cars and trucks and not just the great 'deals'. This will help resale value immensely as MSRP is moving much closer to transaction pricing. Speaking of great cars and trucks MR Okuda, the HHR has been selling like hotcakes with NO rebates. Wouldn't that be considered a 'hot' model?
     
    #8 malorn, Jan 14, 2006
  9. ralphh

    ralphh New Member

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    Uugh...don't get me started on GM and Chevrolet.

    Had a beautiful Chevy Trailblazer...loved it. I really like the styling and it handled great...until the engine shut off on the NJ Turnpike while going 70 mph with my wife, two kids and my mother. Twelve-hundred miles on the SUV. Three hours before we could get back home. A few months later, all the Trailblazers get recalled because of some fuel pump problem that caused engine shut downs.

    So much for my foray into the crap world of GM. Before that we were a Chrysler family and we went back to them and should never have left. Got the Prius for my wife since she puts on a lot of miles on the car and she really likes to save on gas.
     
    #9 ralphh, Jan 14, 2006
  10. EricGo

    EricGo New Member

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    Could you spell out the money calcs ? I come up with something quite different.

    If it is a straight money question, you should also make some guesses regarding depreciation. GM's HHR is up against a history of poor retained value for GM products, and a market segment that will see many CUV's come out in the next year or two.

    If you take emissions into account in your buying decision, note that the HHR is 6/0 on EPA's scale, while the Prius is 9.5/10. Somewhere around TEN times the pollution.
     
    #10 EricGo, Jan 14, 2006
  11. EricGo

    EricGo New Member

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    #11 EricGo, Jan 14, 2006
  12. ralphh

    ralphh New Member

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    Montgomery once said of the Airborne drop into Holland in WW2, "Operation Market-Garden was 90% successful."

    The president of that battle ravaged country said, "We can't afford any more of Monty's successes." :rolleyes:
     
    #12 ralphh, Jan 14, 2006
  13. malorn

    malorn Senior Member

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    Eric the rebates were released simultaneously and are on full-size SUV and pickups which will be replaced this year. that is it. Are you telling me that Toyota has no rebates, dealer cash or low financing options?
     
    #13 malorn, Jan 14, 2006
  14. malorn

    malorn Senior Member

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    Resale is one of the reasons this is being done. This will bring transaction prices much closer to MSRP. One of the big reasons for low resale is used vehicle wholesalers are always afraid of another employee discount debacle adn getting burned on late-model units.
     
    #14 malorn, Jan 14, 2006
  15. ralphh

    ralphh New Member

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    Well...not on the scale that GM offers...
     
    #15 ralphh, Jan 14, 2006
  16. malorn

    malorn Senior Member

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    After the latest pricing move by GM they are actually closer than they have been in 15 years.
     
    #16 malorn, Jan 14, 2006
  17. EricGo

    EricGo New Member

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    I'm pointing out that GM cannot even get it's marketing message regarding sales prices straight.

    It sounds like this to me: "We are DONE with incentives. Uhh.. except where we hand cash certificates to dealers to move vehicles that are piling up on lots".

    Regardless. The entire ploy is just GM trying to evade consumer foreknowledge of manufacturer to dealer rebates. Is this the grand turn-around plan of GM's you have been alluding to ?? I just woke up, and you are making me sleepy again.
     
    #17 EricGo, Jan 14, 2006
  18. ralphh

    ralphh New Member

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    Huh? So after lowering their prices, GM is closer to Toyota?
     
    #18 ralphh, Jan 14, 2006
  19. EricGo

    EricGo New Member

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    This entire business of raising prices in order to give discounts has been silly from the get go. And doubly so now, when even GM's customer base has learned to use the internet and CR to come into showrooms knowing what competitive pricing is.

    I read another forum that has a thread where people post what they paid for their new car. Trust me, the lowest price posted becomes the 'no higher than' for the next customer.
     
    #19 EricGo, Jan 14, 2006
  20. malorn

    malorn Senior Member

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    GM is now closer to Toyota with incentive levels.
     
    #20 malorn, Jan 14, 2006
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