GM Increases Retail Incentives & GM Card Allowances

[Perian]

$ 6,000* Cash Back On A Suburban anyone?

http://gmbuypower.com/viewCurrentOff...e.bp?zip=11732

Another $ 2,500* Cash Back On A Suburban anyone?

http://www.gmcard.com/GMCard/apply/r...allowances.jsp


*Note: 2005 Model Only (2006 Model Is: $ 7,000)

[asim]

Well for the 2005's they are about 3-4 thousand more than the former employee price.

[Member17739]

$5.5K off of a 06 TB SS. Not bad.

[Buickman]

Absolutely ridiculous.

[Perian]

Originally Posted by Buickman

Absolutely ridiculous.

Not really.

You must use incentives when your product portfolio is lacking.

For example:

Last year the Chevrolet Colorado carried a $ 3,000 rebate.

The 2006 model has a $ 1,500 rebate - with almost no list price change.

Why the difference - is the Colorado suddenly hot? No way.

The difference is in production - Chevy is making 50% fewer Colorado units each week. The slack is being taken up by the red-hot Hummer H3, which is built in the same plant.

GM needs to work on the Colorado, no doubt - but it did a very smart and lucrative job bringing the Hummer H3 to market using the Colorado as as starting point.

Because of the existance of the H3, the marketplace acceptance rate (sales) of the Colorado are just about equal to production - no extra cash on the hood necessary.

I will go out on a limb here - but I think GM incentives have nowhere to go in the future...but down in value.

[caddycruiser]

Originally Posted by Buickman

Absolutely ridiculous.

Pretty much, but when you continually boost your MSRP's to levels they should never be even near, you have to constantly chop off big chunks of the sticker to make people look.

Case in point, when we bought our '04 Suburban in June last year, the rebate was $5k and the dealer sold it for invoice to begin with, lowering it another $5k. When you can get $10k off a car without even trying, there's something REALLY wrong.

Our Suburban had a sticker of $40,730 (2wd LS with lots of options), bought it for just under $31k. In the end, why not just have the invoice at $32k and the sticker at $34k? Then add a $1k incentive, if needed, just to keep people interested.

The pricing on the new GMT-900's needs to be dramatically lower than the current GMT-800's or the round of massive rebates will continue--i.e., do NOT allow ANY Chevy model to hit $54k like they do now....that's just crazy.

[Buick61]

Originally Posted by Perian

Why the difference - is the Colorado suddenly hot? No way.

The difference is in production - Chevy is making 50% fewer Colorado units each week. The slack is being taken up by the red-hot Hummer H3, which is built in the same plant.

GM needs to work on the Colorado, no doubt - but it did a very smart and lucrative job bringing the Hummer H3 to market using the Colorado as as starting point.

Because of the existance of the H3, the marketplace acceptance rate (sales) of the Colorado are just about equal to production - no extra cash on the hood necessary.

It wasn't a matter of intelligence, it was a matter of necessity. The Colorado/Canyon plant had too much excess capacity. In plain English: they were paying the union workers a whole lot of money and they weren't making enough vehicles to make it a smart business proposition. So, the H3 design was compromised in order to fit onto the GMT355 platform so as to take up the slack.

Had the plant been better utilized during the conceptual phase of the H3, then maybe it would have been built on a slightly larger, V8 capable platform like the GMT 360.

Further, just because the plant's capacity is being utilized somewhat better, doesn't mean the pressure is off to sell more Colorados. Do you think the Chevy dealers are saying, "I'm fine that we're selling less Colorados since it helps Hummer dealers and GM to make more money."

You're basically saying that Supply fell down to the level of Demand. Which is fine and all, but that just means that there are less Colorados to sell, not that there are more customers, which would be ideal.

[Buick61]

Why do they use internal codes on which vehicles are eligiable? Do you think the average customer--even enthusiasts--know that "Pontiac G6 (excluding LX9)" means all G6s that DON'T have the 3.5L V6 engine?

They do the same with the Silverado and Sierra: LBZ. The heck?

[Rayzilla]

Originally Posted by Buickman

Absolutely ridiculous.

Everything with the HUGE incentives is an out-going, or soon to be out-going model. Tahoe, Suburban et al will be all-new on 07 with the Silverado and Sierra soon to follow, plus the TrailBlazer and others will be getting a re-do in what, 2008? They need to be incentivized heavily to get them gone, otherwise there are plenty of people who will just sit and wait until the new models come out. That said, as nice as I think it is, I think the Colorado needs some help in the marketing and/or cosmetic end to sell better. Plus, dealers who order what people are looking for.

We have actually had guys pass on the Employee Pricing plus $2500 rebate to get the new LBZ Duramax with the 6-speed Allisons. That's a heck of a price difference! Right now, after the new Tahoe splashed everywhere there are people looking to wait for those.

[Tiger]

In the SE region the only large rebates were the full size 2005 SUV's!

The 2006 models all only had $3,000! That's the same as the competition...or less!

[Snafu_SS]

Originally Posted by Perian

Not really.

You must use incentives when your product portfolio is lacking.

For example:

Last year the Chevrolet Colorado carried a $ 3,000 rebate.

The 2006 model has a $ 1,500 rebate - with almost no list price change.

Why the difference - is the Colorado suddenly hot? No way.

The difference is in production - Chevy is making 50% fewer Colorado units each week. The slack is being taken up by the red-hot Hummer H3, which is built in the same plant.

GM needs to work on the Colorado, no doubt - but it did a very smart and lucrative job bringing the Hummer H3 to market using the Colorado as as starting point.

Because of the existance of the H3, the marketplace acceptance rate (sales) of the Colorado are just about equal to production - no extra cash on the hood necessary.

I will go out on a limb here - but I think GM incentives have nowhere to go in the future...but down in value.

wow..never thought of it that way..that kina makes platform sharing seem even more of a good idea..by platform sharing i mean exactly the kina thing you were saying, colorado n H3, not reskins like torrent n equinox.

[desmo9]

Large rebates like these make more people angry than the number of people who redeem them. Such as, people who bought the same vehicle a month before the promo, or people who were not "selected" for the GM Card promo.

And I speak from experience ... several months ago, I bought a GTO as a GM Cardholder, when at the same time, two co-workers received a special top-off promo from GM Card worth an *extra* $5000. We bought the cars in the same week, they paid $5000 less than I did ... about 20% of the transaction price. 20% !!!. So I got in touch with the marketing VP of GM Card, outraged over the inequity, suddenly uphappy with my purchase, and suggested to her that no more than $1000 should separate incentives within a given region.

[Gm786]

Sounds fine to me.

[joey]

Originally Posted by desmo9

And I speak from experience ... several months ago, I bought a GTO as a GM Cardholder, when at the same time, two co-workers received a special top-off promo from GM Card worth an *extra* $5000. We bought the cars in the same week, they paid $5000 less than I did ... about 20% of the transaction price. 20% !!!. So I got in touch with the marketing VP of GM Card, outraged over the inequity, suddenly uphappy with my purchase, and suggested to her that no more than $1000 should separate incentives within a given region.

Well, without the promo, GM would have had one one car sale. With it, they got 3 cars sold.

I wouldn't even look at a GM unless I could use my GM points, since every import has a better value model them most GM models.

[Ming]

I'm going to wait until my GM card allowance hits 3,000 bucks before I even consider another GM purchase. Why? Because I want as big a buffer zone as possible in case GM pulls another massive incentive plan out of its corporate butt and kills my resale/trade-in/insured value. I shouldn't HAVE to buy gap insurance on a new GM car if I'm not upside down, but these days...

I much prefer the Saturn/Suzuki/Isuzu/HyunKIA pricing approach. At least you can track depreciation and have a reasonably good idea if you are getting a "deal" or not. Toyohonda don't offer "value" pricing, but they don't actively depreciate your car by offering $5K off 2 months after you've bought your car -- and Toyohonda religious fanatics will buy your used car for more than they should (a car is a car is a car, regardless of badge), keeping resale higher than the norm.

All are better than the GM buyer's "Am I really getting a good deal here?" fears.