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GM to launch Red Tag year-end sale Saturday


AutoWeek | Published 11/16/06, 3:57 pm et

Link to Original Article @ Autoweek

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DETROIT -- General Motors will start its year-end clearance sale, called the Red Tag Event, on Saturday, Nov. 18.

The sale will run through Jan. 2 and include all brands except Cadillac, Hummer and Saab. The Chevrolet Corvette and Pontiac Solstice also are not included, GM says.

The sale is similar to the promotion GM ran last year at this time, spokesman John McDonald said today.

"What a consumer will see is a Red Tag hanging from the mirrors," McDonald said. "It will list the MSRP and then the price the consumer will pay after the incentives. The dealer decides how much the discount will be."

The discount could range from nothing to $2,000 per vehicle. The program covers 2006 and 2007 models, McDonald said. It also includes most existing incentives on vehicles, so a vehicle could end up with more than $2,000 of incentives on it.

GM employees get a maximum discount of $500, said John Rogin, owner of John Rogin Buick in Livonia, Mich.

"We asked them to start it early this year," Rogin said today. "Why have a customer stand around in the middle of November and not buy a car because they're waiting for the end-of-year sale?"

GM sent notices to dealers about the sale today, McDonald said. He would not discuss specifics on how the program works, but dealers say each dealer will get a certificate worth $250 for each vehicle in inventory. The dealer can apply up to eight certificates, or $2,000, on any one vehicle.

"If the Buick Lucerne is turning quickly and doesn't need any incentive money, then a dealer could take that certificate money and put it on a 2006 model or some other vehicle," Rogin said.

Dealers have until Friday, Nov. 17, to tell GM the vehicles on which they plan to add the incentive money, Rogin said. He said he has 10 2006-model vehicles left in stock and likely will use many of his certificates on those vehicles.

GM has just over 1 million 2006- and 2007-model vehicles in inventory, McDonald said. He said 80 percent of those are 2007s.

GM likely won't spend all its incentive money -- about $250 million -- because dealers won't sell every vehicle they put the money on, said Gordon Stewart, president of Stewart Management Group in Harper Woods, Mich.

"(This sale) is a little confusing, to say the least," Stewart said today. "I wish it were more clear and didn't have so many twists to it. The simplest incentives often work the best."

Stewart said he'll likely put most of his certificate money on his 2006 models.

GM plans to advertise the sale aggressively in print and on TV, radio and the Internet, McDonald said.

He said GM will advertise the sale through the respective brands with the same tag line as last year's promotion: "See some red, save some green."

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This is kind of lame, but good at the same time. GM should be able to determine what each car needs to be sold in its respective area, and apply incentives accordingly. It's good though because it doesn't look like they're whoring out on the incentives.

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I had to laugh when our dealer principle called a special meeting on Tuesday (they call a lot of meetings at which they don't say much because they don't have to actually pay any of the 15 pairs of eyes staring blankly back at them) to announce the Wish and Win.

At least this year we don't have to sit on the line with On Star and go through the same spiel 200 times. The internet connection is faster, sort of. Our dealer wanted us to work extra hours, blah, blah because of the rush.

Yeah, right. Just like the iPod flop that they announced back in April. They couldn't even give away 10,000 ipods, or whatever their target was. Rush?

Hot dogs and balloons don't sell cars any more. It's kind of embarassing. Sure, it can be a good deal ((I had one couple win 3,700 off their vehicle last year), but its randomness assures no control over the actual deal. And, of course, it attracts all the usual coupon clippers who just want to see if they can win a free vehicle.

I mean, what can you do with the owner of a 2004 Malibu who owes $18k on the vehicle that is worth $12k? Anything short of a $5k prize is just wasting both our times.

Although we, the sales staff in the front lines, groan every year at this program, we must put on a happy face and get all hyped whenever the customer "wins" $550.

Give me 0%/60 months and no payments for 90 days - now THAT drives customers into the show room!

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Last weekend........no less than 8 06 GTO's sitting on Otto Cadillac/Pontiac lot, formerly Otto Olds. These GTO's will probably be getting cheap come next April...... :lol:

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