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The latest innovation in incentives is a $500 coupon General Motors dealers can use to close tough sales. GM dealers can apply as many as two "instant value coupons" to a transaction.

Although the automaker is reluctant to disclose details, GM says it issues the coupons on selected models.

The number of coupons dealers receive depends on several factors, including their sales history. The latter element causes some dealers to complain of unfairness in the program.

The coupons give dealers greater bargaining power in an intensely competitive market. Spiraling incentives have raised customer expectations of big rebates, dealers say.

Closing tool

"The purpose of the program is to provide a closing tool for dealers that they can use selectively," says GM spokesman Deborah Silverman. "The decision on which vehicles to offer coupons is based on the same factors we use in all other incentive programs - the competitive landscape, market conditions, sales rates, other elements of our marketing efforts."

In the past few months, Chevrolet dealers have gotten instant value coupons for the Silverado and Avalanche.

"I like it," says Carter Myers III, CEO of Carter Myers Automotive in Charlottesville, Va. "We might get 10 of the coupons (in a month), and we can use them however we want to."

Dan Holder, sales manager of Bill Heard Chevrolet in Atlanta, says the coupons can be effective closing tools.

"Let's say you are $500 away from what the customer wants for the trade-in," Holder says. "You can give him the $500 and throw a coupon in the deal."

But some dealers gripe that GM's coupon program is unfair because it is based on sales history rather than assigning a flat amount per model.

Holder says his urban dealership sells 15 to 20 Silverados a month. Some rival dealers in suburban and rural communities outside Atlanta sell 150 or more of the trucks monthly.



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