Intrepidation

GM brings back employee pricing to sell remaining 2008 models

74 posts in this topic

It is no secret that the automotive industry is hurting for sales to close out 2008. Over the past few months incentives have been thrown out left and right to draw in more buyers. The deals have not done enough to bring folks into the showroom, though. With all the media talk of bleeding Detroit, consumers know that the domestic manufacturers have been holding out on their best offers. Perhaps the memory of 2005's employee pricing incentives has kept many waiting on the fence. With 2009 models heading to dealerships as we speak, General Motors is hoping to end the stalemate. It will be testing the waters of employee pricing yet again beginning Wednesday, August 20th and running through September 2nd.

The employee discount program will apply across all 8 GM brands. Buick, Pontiac and GMC dealers will mark down 91 percent of their inventory on all 2008 models, along with the 2009 Pontiac Vibe and G5, Chevy Cobalt and HHR and, surprisingly, the Cadillac CTS. Chevrolet dealers can unload 90 percent of their 2008 inventory with all 2008 models eligible for the employee price. Cadillac, Saturn, SAAB, Hummer will each have their own stipulations as well, but it is certain that the discount will be widespread. The price reduction varies from vehicle to vehicle, but is typically on order of a few thousand dollars. Additional incentives will also still be offered on some slower selling items, such as, you guessed it, trucks and SUVs. So the question is, will employee pricing get you off the fence and into a dealership?

Souce: Autoblog

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I will try to buy a Tahoe LTZ off of the dealer this week. We shall see. My lease on my Tahoe is up in February. Will keep you all posted.

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I hate to say this, but I hope they offer this deal next year when my AURA lease expires. We were lucky to take advantage of it last time (August, 2005), as my wife's Rendezvous was 5 months away from lease-end and GM gave us a pull-ahead offer with the Employee Pricing deal. It gave me a fully loaded Envoy SLT 4WD for a sweet deal. Of course with leasing going away, I'm facing the fact I will have to purchase my next ride and if the incentives are good enough, maybe it will help me to get "more vehicle" for my money (of course a year from now can be a whole different picture).

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This is so dumb to have on the '09 models. Why would anyone buy an '08 CTS, G5, Cobalt, or HHR now, if the '09 is going to have more or less the same deal? I wish they would put it on the '09 G8, then my dad might buy one.

And to have it on the CTS, Cobalt, and HHR is dumb in the first place. The CTS is selling well without any incentives, and the Cobalt and HHR are out of stock everywhere, it is clear they don't need incentives... gas is $3.75/gal, why discount the most fuel-efficient cars? Just dumb...

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This is so dumb to have on the '09 models. Why would anyone buy an '08 CTS, G5, Cobalt, or HHR now, if the '09 is going to have more or less the same deal? I wish they would put it on the '09 G8, then my dad might buy one.

And to have it on the CTS, Cobalt, and HHR is dumb in the first place. The CTS is selling well without any incentives, and the Cobalt and HHR are out of stock everywhere, it is clear they don't need incentives... gas is $3.75/gal, why discount the most fuel-efficient cars? Just dumb...

The only 09 it's on is the Pontiac Vibe, at least that's my understanding.

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Nice. That's more than $5K off MSRP on a CTS 3.6 DI.

Or $8K off a $30K Sierra 1500 2WD SLE.

Edited by empowah
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This is so dumb to have on the '09 models. Why would anyone buy an '08 CTS, G5, Cobalt, or HHR now, if the '09 is going to have more or less the same deal? I wish they would put it on the '09 G8, then my dad might buy one.

And to have it on the CTS, Cobalt, and HHR is dumb in the first place. The CTS is selling well without any incentives, and the Cobalt and HHR are out of stock everywhere, it is clear they don't need incentives... gas is $3.75/gal, why discount the most fuel-efficient cars? Just dumb...

well gm said there would be a pretty considerable price hike for 2009, so it wouldnt really matter.. and employee discount doesnt hurt GM's pocket, it hurts dealers pocket books... but in actuality the dealers like the promo because it brings a huge flux of customers, and it will fill showrooms and move used vehicles...

employee discount removes all profit from the dealership and gives it to the customer, the philosophy is, if GM isnt making money, why should its dealers, because someday, GM cannot last through the losses...

the employee discount this time around is more valueable because it will bring a large portion of customers that havent looked for a car for 3 years, and will notice a difference in GM's products... and besides, it is a good time frame since the last employee discount...

I honnestly think this is good news, and a good deal for GM... although it hurts resale, i doubt resale will be affected, we are about to experiance massive inflation, and the price of used vehicles is about to climb rather then fall... so it really doesnt matter.

I'm certain GM has only applied GME discount on vehicles with a certain surplus, days in inventory... this will help 3rd quarter reduction in inventory, as well as bolster consumer confidence, and increase factory production aka revenue.

CTS is probably included to shuffle consumers to cadillacs door step... likely they have already sold out and are just delivering fresh faces to the dealership to flip onto another vehicle... pretty standard in the industry...

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There's a sharp gray '09 G5 GT at a local PG dealership...
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The CTS is selling well without any incentives

If this were true then I don't think it would be offered as part of the program. Obviously sales must have slowed quite a bit.

Even with the discount, the new CTS (in the form I'd want) is still too pricey for me unfortunately :(

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well gm said there would be a pretty considerable price hike for 2009, so it wouldnt really matter.. and employee discount doesnt hurt GM's pocket, it hurts dealers pocket books... but in actuality the dealers like the promo because it brings a huge flux of customers, and it will fill showrooms and move used vehicles...

employee discount removes all profit from the dealership and gives it to the customer, the philosophy is, if GM isnt making money, why should its dealers, because someday, GM cannot last through the losses...

the employee discount this time around is more valueable because it will bring a large portion of customers that havent looked for a car for 3 years, and will notice a difference in GM's products... and besides, it is a good time frame since the last employee discount...

I honnestly think this is good news, and a good deal for GM... although it hurts resale, i doubt resale will be affected, we are about to experiance massive inflation, and the price of used vehicles is about to climb rather then fall... so it really doesnt matter.

I'm certain GM has only applied GME discount on vehicles with a certain surplus, days in inventory... this will help 3rd quarter reduction in inventory, as well as bolster consumer confidence, and increase factory production aka revenue.

CTS is probably included to shuffle consumers to cadillacs door step... likely they have already sold out and are just delivering fresh faces to the dealership to flip onto another vehicle... pretty standard in the industry...

Employee Pricing is a marketing campaign wrapped around a catchy slogan: nothing more, nothing less. Chrysler has been advertising 'family' and employee pricing around here for months. Judging by some of the nasty counter-ads Chrysler dealers are taking out in the papers against each other ("our dealership believes sales should be for everybody!" ran one ad in the Sun recently), I would say the entire program is flopping for them.

July/August '05 were two the best months I ever had in this business, both from a volume and total gross point of view. My former dealer had the best month they had had in years - and made a ton of money. Traffic spiked up considerably in the beginning, as people flocked to dealers, thinking they were going to save $5k on a Cobalt. When they realized there aren't those kinds of margins (the difference between MSRP and 'invoice price' is shockingly less than most people think), out the door many of them went.

50% off sales at Sears and Walgreens confuse people. To me, it is the great irony of our modern times that the mark-up on food, clothing and furniture - 3 important staples that we need to survive, is more than 100%; yet, on luxury items, like electronics and autos, the margins are less than 10%.

I know that sales in the U.S. are sluggish. Canada has fared a little better, but most dealers are carrying half the inventory they normally would for this time of year so there will be no fire sales this summer. Then again, for us, since the $C has been virtually at par for more than a year, our prices are down substantially from where they have traditionally been.

When I think that a Cavalier, automatic, air and cassette LEASED for $330 a month with $900 due on delivery back in '01 and now a Cobalt Team Canada edition (leather steering wheel, power sunroof, 155 hp ecotec, automatic, power group, auto headlights, OnStar, side airbags and ABS) SELLS for $330 a month with ZERO down - well, I say bring on the Canadian dollar!!

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well gm said there would be a pretty considerable price hike for 2009, so it wouldnt really matter.. and employee discount doesnt hurt GM's pocket, it hurts dealers pocket books... but in actuality the dealers like the promo because it brings a huge flux of customers, and it will fill showrooms and move used vehicles...

employee discount removes all profit from the dealership and gives it to the customer, the philosophy is, if GM isnt making money, why should its dealers, because someday, GM cannot last through the losses...

the employee discount this time around is more valueable because it will bring a large portion of customers that havent looked for a car for 3 years, and will notice a difference in GM's products... and besides, it is a good time frame since the last employee discount...

I honnestly think this is good news, and a good deal for GM... although it hurts resale, i doubt resale will be affected, we are about to experiance massive inflation, and the price of used vehicles is about to climb rather then fall... so it really doesnt matter.

I'm certain GM has only applied GME discount on vehicles with a certain surplus, days in inventory... this will help 3rd quarter reduction in inventory, as well as bolster consumer confidence, and increase factory production aka revenue.

CTS is probably included to shuffle consumers to cadillacs door step... likely they have already sold out and are just delivering fresh faces to the dealership to flip onto another vehicle... pretty standard in the industry...

I, on the other hand, think this is a horrible promotion.

:angry:

GM is so boneheaded at times, it really pisses me off.

Why?

Let me tell you........

* Great....we have "GM Employee Pricing." That means that IF we take advantage of that, we HAVE TO adhere to that for EVERY new car we sell.....not just "aged" units. Guess what our dealership makes from doing a GMS deal? About $400. That's it. But GM says we get the "memo" amount.....(which is around $2,200 for a loaded CTS.) BUT what GM ALWAYS forgets is that after dealership "packs" (which are held aside to pay salespeople and cover other assorted costs, etc., etc) we are left with only around $400.

* Guess what else they did? ALL zero-percent financing WENT AWAY.

* Also, our customer cash on Escalade and DTS was reduced by around $1,000 each.

* AND you can guess what happened to lease rates? Our buy-rate on a GMAC CTS lease went up TWO percentage points from July to August.....and effective with this promotion, the buy-rate goes up ANOTHER 1.8 percentage points.....effectively taking Cadillac OUT of the leasing market (even with a low GMS price to work with....payments are now way too high.) This huge increase in rates was across the board as well....DTS, Escalade, you name it.

* All these people coming off lease and wanting another car back when GM last did employee pricing are finding out that, due to the $h!ty incentives we have now, they can't afford to get into another car (unless they want a payment $300-$400 more a month now.) Last time GM did employee pricing, they had much more aggressive incentives (and really not just incentives, it was the way more aggressive finance and lease rates) to combine with the employee pricing.

So I want SOMEONE....ANYONE tell me why this promotion (synchronized with the loss of 0%, customer cash reductions, and dramatic increases in finance and lease rates) even remotely positive?

ONE thing I will say positively.....it WILL drive alot of traffic.

AND, as an Internet Director, I will capitalize on that. But I bet what you'll see is a HUGE increase in pre-owned business at dealerships due to the increase in traffic and not nearly as much uptick in new car sales as what GM is hoping.

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AND another thing.....while I'm blowing off steam.......

What ever happened to incentives that help build VALUE in the product?

I thought GM was supposed to get away from this "...let's drop-our-pants on the price because our cars will never sell unless they have a huge discount..." mentality....!

The 0% (or 1.9%, 2.9%....whatever....) financing was GREAT because what the customer saw was a HUGE savings in interest fees........allowing us to still build and sell the value in the product without having to resort to huge discounts to get the consumers into the cars.

Or what about more trunk money? You know.....dealer cash that allows the dealer to offer a larger discount on the car.....without it seeming like (in the customer's eyes anyway?) A large dealer cash incentive helps the dealer also build value in the car.....and is far less damaging than a "consumer rebate" because the customer doesn't see the dealer cash as such.....they just see it as a dealer-led discount on the car. Whereas a "rebate" is the company, GM, saying "we need to give you money to buy our car."

Anyways.....

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Great if it helps sell cars who cares. These are the prices GM should just put on the cars to begin with. If a dealer makes more than $500 on me than they are making to much. Yeah somebody will tell me there in buisness to make money, and I am out to save myself my money. Plus I come back and pay for the overpriced service. This is good for dealers even if they bitch about the profit and for GM because the market right now is REALLY slow. Hell I can get a new DTS V8 stripped for 35K that is tempting.

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Great if it helps sell cars who cares. These are the prices GM should just put on the cars to begin with. If a dealer makes more than $500 on me than they are making to much. Yeah somebody will tell me there in buisness to make money, and I am out to save myself my money. Plus I come back and pay for the overpriced service. This is good for dealers even if they bitch about the profit and for GM because the market right now is REALLY slow. Hell I can get a new DTS V8 stripped for 35K that is tempting.

$500....? Absurd....and spoken like someone that knows nothing about the dealer side of the car business. (Do you know what "overhead" is?)

GM could have taken another route.....which would have sparked traffic....AND allow the dealers to make money. As so many people have said, the dealers need to be just as successful as GM itself if GM is going to survive.

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Trust me O.C. I know plenty about dealers, they make money on service and over-pricing parts. If I can't get a good deal on a car then forget them. If they make more than $500 on me they are making too much money. Sure some pig dealers want to and do make more, but when I buy a car I don't want to get screwed. Wonder why I ended up with a purple Torrent because it was a deal. When you sell a car you sell your service and take the car back there. Once again if a dealer needs to make more than that on a car then they can stick it and not "get another customer to screw on service" then that is there problem. Then again I am old school. One salesmen only made $50 bucks off me but they got a customer and I got "screwed on service" so they made it up trust me. Then again if you work for a dealer $500 for only two hours of a sales persons time seems like good money to me. Oh and I understand overhead, don't sell me the typical poor car dealer line I got that run-around when I got my Bonneville. You think dealers make alot off of me when I buy? Hell no but I am loyal and bring my cars back for service that is when they make there money back. If you can't make money on service then your obviously doing something else wrong. Ultimately your hurting yourself and losing my buisness I have had dealers treat me like that and I DON'T buy there. If you work at one that is like that I wouldn't do buisness with them. Sorry. I am a hard-ass. And an even tighter one.

Edited by gm4life
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$500....? Absurd....and spoken like someone that knows nothing about the dealer side of the car business. (Do you know what "overhead" is?)

GM could have taken another route.....which would have sparked traffic....AND allow the dealers to make money. As so many people have said, the dealers need to be just as successful as GM itself if GM is going to survive.

do you honnestly think GM cares about the dealers? they want to reduce them, so why not take away their means for business, their profit...

i got in the dealership in august, after the inventories were all blown out of 05... we still had the truck and suv market cournered with more vehicles then anyone..

let me give you the run down,

when business is slow, i mean less then 100 cars per weekend... dealers will focus on per unit profit... making sure to make 'pounders' with every sale...

when the ecconomy is bad, consumers need the products, and the manufactures, need the consumers to afford the product.

you are bitching about this years GME being less incentive then previously... well thats because GM is still cutting back on incentives...

GM must do what it takes to survive. and selling in volume, has been GM's cheif advantage for the last 70+ years... ignoring that would be foolish, as market share shrinks...

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I don't like this because it kills resale values. It is good at clearing out inventory, especially on stuff like Impala, G6, Trailbalzers, but it is bad to do on CTS, Malibu, etc. They need better products that they can sell without deep discounts if they want to recover.

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I fail to see how it is going to help sales....repos are getting close to a all time high.

More and more consumers can't afford to pay credit card payments...

GM has been cutting more and more " bad" credit customers out.....

So tell me again why I should rush out and buy a new car? :confused0071:

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They simply have no choice....although inventories aren't bad, the current economic climate means most dealers have ordered significantly less 09's than GM had planned to produce.

You've got to clear the lots of 08's to force dealer's hands---most dealers I know have hunkered down, cut inventories by 25% or more and emphasized their used operations & service departments in an attempt to keep things afloat. Layoffs have begun at the dealer level, big time.

IIRC, a majority of Domestic showrooms and almost half of the Imports dealers lost money in 07. Can't imagine 08 being better. Dealers are still the gateway to product, so keeping them starving isn't a great long/short term plan for any manufacturer.

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Trust me O.C. I know plenty about dealers, they make money on service and over-pricing parts. If I can't get a good deal on a car then forget them. If they make more than $500 on me they are making too much money. Sure some pig dealers want to and do make more, but when I buy a car I don't want to get screwed. Wonder why I ended up with a purple Torrent because it was a deal. When you sell a car you sell your service and take the car back there. Once again if a dealer needs to make more than that on a car then they can stick it and not "get another customer to screw on service" then that is there problem. Then again I am old school. One salesmen only made $50 bucks off me but they got a customer and I got "screwed on service" so they made it up trust me. Then again if you work for a dealer $500 for only two hours of a sales persons time seems like good money to me. Oh and I understand overhead, don't sell me the typical poor car dealer line I got that run-around when I got my Bonneville. You think dealers make alot off of me when I buy? Hell no but I am loyal and bring my cars back for service that is when they make there money back. If you can't make money on service then your obviously doing something else wrong. Ultimately your hurting yourself and losing my buisness I have had dealers treat me like that and I DON'T buy there. If you work at one that is like that I wouldn't do buisness with them. Sorry. I am a hard-ass. And an even tighter one.

But in the end you still expect 'loaner vehicles', free coffee and a nice lounge to sit in while your car is being fixed, right?

I'll bet your the same kind of person who bitches and whines that the sales staff don't know what they're talking about or anything about their product. Guess what, bub - that costs money, too. Would you work 60 hour weeks, every Saturday, and many holidays for $30k a year? Didn't think so.

You want professional service and professionals to work with, you gotta pay for it.

Most dealers do lose money in their new car show rooms. The reason why so many sales people don't know what they're talking about is because they've only been there 3 weeks. They are 'free' to the dealer and expendable. The senior guys won't deal with the a-holes, or they're by appointment only (although those days are somewhat diminished.)

The consumer seems to want it both ways. The same guy who bitches at Wal-Mart that his $20 blender busted instead of buying the $60 one at Sears.

Back on topic: although they haven't introduced employee pricing here (and I doubt they will because nobody has any 2008 products left anyway), it won't matter to me either way. It's the PERCEPTION of the deal that counts, and Employee Pricing gives the IMPRESSION that the customer is getting the best deal EVER.

Besides, most people wouldn't know a good deal if it bit them on the giggly parts.

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The consumer seems to want it both ways. The same guy who bitches at Wal-Mart that his $20 blender busted instead of buying the $60 one at Sears.

Well Sears was bought by K-mart a long time ago and I doubt that it is necessarily any better.

The employee pricing thing is going to be very common in these economic times, We are having some renovations done to our home and a neighbor is getting us "friends and family" pricing on some laminate flooring from a major brand name manufacturer.

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Well Sears was bought by K-mart a long time ago and I doubt that it is necessarily any better.

The employee pricing thing is going to be very common in these economic times, We are having some renovations done to our home and a neighbor is getting us "friends and family" pricing on some laminate flooring from a major brand name manufacturer.

People still go to Sears and K mart? :confused0071:

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But in the end you still expect 'loaner vehicles', free coffee and a nice lounge to sit in while your car is being fixed, right?

I'll bet your the same kind of person who bitches and whines that the sales staff don't know what they're talking about or anything about their product. Guess what, bub - that costs money, too. Would you work 60 hour weeks, every Saturday, and many holidays for $30k a year? Didn't think so.

You want professional service and professionals to work with, you gotta pay for it.

Most dealers do lose money in their new car show rooms. The reason why so many sales people don't know what they're talking about is because they've only been there 3 weeks. They are 'free' to the dealer and expendable. The senior guys won't deal with the a-holes, or they're by appointment only (although those days are somewhat diminished.)

The consumer seems to want it both ways. The same guy who bitches at Wal-Mart that his $20 blender busted instead of buying the $60 one at Sears.

Back on topic: although they haven't introduced employee pricing here (and I doubt they will because nobody has any 2008 products left anyway), it won't matter to me either way. It's the PERCEPTION of the deal that counts, and Employee Pricing gives the IMPRESSION that the customer is getting the best deal EVER.

Besides, most people wouldn't know a good deal if it bit them on the giggly parts.

No I am not someone who bitches about the lounge area, and don't need freebies. It is a two way street. If they have a chair to sit on and a knowledgeable sales staff (may not know as much as me) but still know the product I don't care. I understand you get what you pay for and trust me I get a good deal on a car and take it in the pants on the service.

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No I am not someone who bitches about the lounge area, and don't need freebies. It is a two way street. If they have a chair to sit on and a knowledgeable sales staff (may not know as much as me) but still know the product I don't care. I understand you get what you pay for and trust me I get a good deal on a car and take it in the pants on the service.

So, it offends you to dole out an extra $1 on the sale, but they can rip you off to their hearts content on the service end?

That simply makes no sense.

If a dealer can't make a decent buck, you simply won't have that dealer around, eventually. $500 won't cover the finance charge on the floorplan cost of the average GM vehicle (based on age of inventory and dealer cost), never mind paying the employees or keeping the lights on.

I'll be sure to stop by your job and see if some fat can be trimmed over there by cutting your wages--how does 1/2 a paycheck sound?

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