GM set to offer employee discount to all customers

[pupp1]

GM set to offer employee discount to all customers


By K.C. Crain
Automotive News / May 31, 2005



DETROIT -- Now everyone will get the General Motors employee discount - at least for a month.

According to dealers, GM will offer every customer the chance to get a vehicle at the employee discount rate, starting Wednesday, June 1.

Not all details of the program are known, including whether the new discount replaces or is in addition to cash rebates. The deal applies only to 2005 model year vehicles.

GM has been pushing a variety of discount programs to its employees and suppliers, and allowing them to extend the discount to a limited number of family and friends. The new program greatly expands the scope of the discount, particularly to areas of the country where GM does not have a large presence.

The incentive means customers will be able to get a vehicle at a predetermined percentage below the dealership invoice price. Some dealers say the discount can amount to 4 percent off the invoice price.

The program will cover almost every GM vehicle. The Chevrolet Corvette is excluded.

According to GM, the employee discount is not a fixed amount, and the percentage varies per vehicle.

GM is expected to announce the program Wednesday.
Source

[HOJIMAN2K3]

That's nothing new in my 'hood, they have been offering that at one of the larger dealerships in our city for a couple of months now, I guess they got some response out of it if it is going countrywide.

You could always tell them you work for Avis and get the fleet rate, lol

[redimpss5]

OK, I'll take it!

[Swahili]

I think this will help sell vehicles for the time being, but it won't help profitability in the long run. It's the same thing we've been saying over and over, people will just wait to buy GM for a time when they are heavily discounted. I don't want to sound negative because all I want to see is GM stay at #1 and throw a wrench in Toyota's rapidly growing gears.

[XCR440SP]

I'd think this is going to really upset the dealers. These employee purchase plans pay very little dealer profit so if they do nothing but plan sales I'd think it will really hurt their bottom line. I guess GM figures that the dealers should be in financial trouble also!

[geronimo66]

Wow, I could be wrong but shouldn't people 'want' to buy your cars without you putting them on the discount closeout rack...

GM managment seems to be trying very hard for that chapter 11.

[goblue]

Sounds gimmicky, what happened to the reasonable MSRP pricing plan? Its really simple to price a GM vehicle. Just undercut Toyota by 10% on cars and 5% on trucks and SUVs for the same features. Minimal incentives required, resale values soar, and GM rebuilds a reputation. Buying a GM vehicle (especially a car) represents taking a chance for many people, that should be reflected by MSRP.

[CF_Willy]

Originally Posted by goblue

Sounds gimmicky, what happened to the reasonable MSRP pricing plan? Its really simple to price a GM vehicle. Just undercut Toyota by 10% on cars and 5% on trucks and SUVs for the same features. Minimal incentives required, resale values soar, and GM rebuilds a reputation. Buying a GM vehicle (especially a car) represents taking a chance for many people, that should be reflected by MSRP.

Look close and they're already undercut in a lot of products.

This GMS for everyone strategy should do wonders for the enthusiasm of GM employees. I wonder if they will reduce incentives for the masses, move to GMS pricing, and then give additional incentives to employees.

[Suzuki Phil]

I bought a new 05 Silverado Quad cab 5.3L auto last weekend, paid $20,000 for it excluding tax and license. I was going to use gm supplier pricing but decided to make an offer and it worked .

Philip

[jokuvaan]

Soon GM will start dumping cars on people's home yards during nights and slip keys to mailbox.

[Ming]

All this talk about cutting back on incentives has been just that. Talk. Every time I open my mailbox there's some new unbelievable deal from GM or the GM card.

[Perian]

Originally Posted by XCR440SP

I'd think this is going to really upset the dealers. These employee purchase plans pay very little dealer profit so if they do nothing but plan sales I'd think it will really hurt their bottom line. I guess GM figures that the dealers should be in financial trouble also!

The following quote is dated July of 2003:

Art Spinella, president of CNW Marketing/Research in Bandon, Ore., says about 582,000 vehicles were sold on employee discount programs in the United States last year. That represents about 3.5 percent of total U.S. light-vehicle sales.

Employee-discount programs affect the Big 3 most because they have the most employees, suppliers and dealerships in the United States, Spinella says. Automakers have steadily expanded the programs and probably will continue, he says.

Though sticker prices are discounted, the programs can be lucrative for automakers, Spinella says. That's because they don't have to pay marketing allowances or holdbacks to dealers in many cases.

[bowtie8_3]

Ok so they are giving my GMS family price to everyone......so what are they going to do now to take care of the GM employees and their family members? I purchased my last 5 vehicles using the GMS price and it is great. Maybe GM will kick a little bigger discount to the GM family members, if so im buying another one!

[saturnsteve]

Yeah, they announced this last week! This will help us sell a lot of cars!!!

[Rayzilla]

Originally Posted by Ming

All this talk about cutting back on incentives has been just that. Talk. Every time I open my mailbox there's some new unbelievable deal from GM or the GM card.

It's not like GM can snap it's fingers and cut off rebates. Even if they institute a MSRP/Invoice discount on the cars it would take MONTHS to do. Meanwhile there are tons of '05 stock on the lots with '06's coming.

In reality, this is pretty much a reallocation of the rebate money from last month. With the GMS price and the $3000 rebate this month a Denali XL is just $500-800 less than it was last month. Last year and year end the rebate on them was $6000. Same old same old, just repackaged. But...repackaged enough that the buying public will come in and buy.

Plus, by showing GMS and a smaller rebate, this may help to wean people off of the huge rebates. 2006 Models do not qualify for the GMS pricing sale. Maybe their setting the stage for the 2006 model year?

You can't turn a ship this big on a dime.