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GM kicks off another national incentive program

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By: Jamie LaReau Automotive News DETROIT -- General Motors is starting a national incentive program to run through Jan. 3 despite claims that it would hold to its value pricing strategy. The program, called GM Red Tag Event, starts Monday, Nov. 14, auto dealers say. A GM spokeswoman declined to comment on Friday, Nov. 11. Under the program customers can get any 2005 or 2006 Buick, Pontiac, GMC or Chevrolet car or light truck at the supplier price plus $100, several dealers say. The exceptions to the sale are the Pontiac Solstice, Chevrolet Corvette and new Buick Lucerne, they say. The supplier price is the price offered to employees of GM suppliers. For example, a 2006 Buick LaCrosse has a sticker price of $23,595, says a Buick dealer who asked not to be named. The supplier price is $21,996, he says. Customers also can use any applicable incentives. GM offers a $1,500 rebate on the LaCrosse. Therefore, the vehicle would cost $20,596, the dealer said.
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Red Tag sale.....excuse me while I barf at this. The name, couldn't get anymore desperate. GM is really showing desperation these days, and, literally, all the equity and resale value of thier cars are gone. There's no worse way they could go. What happened to total value promise? What happened to adjusting to market pricing. That would help resale value much better than the constant price jumps. GM seems to just want to keep factories humming these days and not really worry about profits.
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I think this is very bad news for GM. Of course, some kind of end of year sale had to happen, but did it have to include ALL cars? Isn't the Impala selling well enough not to hurt its image with the lower pricing. Certainly this will push sales of even the stronger cars, but when someone who has done research thinks of buying this in March when there is no Red Tag, they will just wait until the summer when the profit eating incentives are back. Seriously, couldn't GM have at least excluded some of the cars, in small print, and maybe included those on some kind of reduced rebate program? Red Tag buyers would still come in and find a rebate instead, and still purchase the car they want because of the normal value proposition that it is, in this case the Impala.
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Red Tag sale.....excuse me while I barf at this. The name, couldn't get anymore desperate.

[post="42072"]<{POST_SNAPBACK}>[/post]


GM used the "Red Tag" event last year if I'm not mistaken. It's a seasonal event.

But... in reply about it sounding desperate, at least it's not called:

"GM Blue Light Special" event :lol:
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I have no facts on which to base this, but I hope GM sees something special in the Buick Lucerne to group it, with the Solstice and Corvette, as the exceptions to the sale. I mean, they haven't even given the Lucerne a chance yet.
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I don't know why people bitch about incentives. C'mon, the cars sell price has to reflect what the market thinks its worth. Otherwise its rots on lots. Successful retail is based primarily on fast inventory turns with low actual inventory $$$ on hand, and its based on profit margins. Since GM insists on artificially inflating its sticker prices to hook the occasional sucker and artifically inflate loan values to cover negative equity trades, they have to discount to move the iron to avoid them rotting on lots. There's two options......cut MSRP's. or, have incentives and sales. I'm tired of all the pissing and moaning about the cars having incentives on them. Or, they are fleet cars. Let's all just f*ing come on here. The issue is that the cars suck and nobody wants them. Build better cars. THERE, someone said it. VW will sell every 38,000 Passat it brings to the US. Meanwhile, those of us with yeoman pocketbooks need something affordable. So, a lot of the population needs to shop on price but still doesn't want a piece of crap to drive. Just improve the f*ing cars. I read a story once that said the last version of the Chrysler 300, if only Chrysler had alloted 200 dollars more per car it would have allowed them to substantially upgrade and improve the interior, as opposed to the cheap bits it had. Instead we'd rather put pushrods under the hood, melt kids toys and turn them into dashboards, and leave off folding mirrors and grab handles above the doors. Nope, the marketers would rather have the thousands to play with to make their own jobs easier. As long as GM is selling crap for cars, then they will need to mark them down. Why is it when Best Buy marks down that digital camera 50 bucks, we get all damned excited and run out and buy it and tell everyone we got such a great deal on a great camera....but the moment a car gets marked down, you're a scourge to society for buying a goodwill shirt? Well, I guess its because the world must see you as a poor lemming if you only have 20,000 to spend on a Malibu. They seem to think you are a lower life form buts its acceptable to toss 29 grand out the window for a Camry? -drop MSRP's to relfect true market value -improve the cars to reflect the MSRP or do both, improve the cars and drop the MSRPs. Edited by regfootball
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I have no facts on which to base this, but I hope GM sees something special in the Buick Lucerne to group it, with the Solstice and Corvette, as the exceptions to the sale.  I mean, they haven't even given the Lucerne a chance yet.

[post="42086"]<{POST_SNAPBACK}>[/post]


I think it's probably because the Lucerne is just now hitting lots, and it'd be stupid for GM to discount it heavily if it will sell at MSRP. In addition, even if it doesn't sell well there won't be many on the lots, so it's not like they'll be an overflow of Lucernes.
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Disappointed. I guess we'll have to go another year with crazy incentives until GM finally understands how to price their cars correctly. That's the only part of reg's argument I agree with. GM's new cars rock, for the most part. I see little need for them to be "improved." People will purchase them, as we have seen, but only if the price is right.
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I wouldn't get too excited about all this. EVERY year, since as far back as I can remember, GM has had some kind of "clearance" sale around the Christmas market, which was traditionally a slower time of year. However, they used to start the (in Canada, at least) Boxing Week specials in mid-December. I have to admit they have been getting earlier and earlier every year. We joke that it is now Boxing Month, but it general it has been a measured response to a slow time of year.
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One of the stupidly hilarious posts on Autoblog:

HAHA, this should be called "The Big Red Tampon Event"....to stop the bleeding!!!!

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every year Lexus has a year end event too. Seriously. Improve the cars all the way through to match the worth of their MSRP or drop the MSRP's. Impala SS's should not have sticker prices of 32,000 bucks. G6's should not be priced near 30 grand. GXP's should not be 33 grand. Maxx's should not approaching 29 grand. If the Maxx were attractive, didn't have a pushrod engine and 4 speed, and had an interior that wasn't cheesy....than ask 28-29 grand. Otherwise don't put a 29 grand sticker on it. Price it at 24-25 grand out of the gate and maybe folks would respect you more. Improve the cars so there are no competitive disadvantages or drop the price to reflect their shortcomings. GXP, it needs better styling, a much better interior with a bigger backseat, and a 5 or 6 speed automatic. otherwise, its a darned good car. But don't ask 33 grand for one. 26 or 27 grand is about what's worth. the sticker should say that.
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GM needs this. In today's paper Corolla LE is going for $3000 less than cobalt. Camry LE 4 cylinder and Cobalt are nearly the samne price.
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GM needs this.  In today's paper Corolla LE is going for $3000 less than cobalt.  Camry LE 4 cylinder and Cobalt are nearly the samne price.

[post="42249"]<{POST_SNAPBACK}>[/post]

yes but the Corolla is truly worth 3000 less than the cobalt . crappy little cheesebox.
If Toyota can sell cars without incentives , isn't not raising your prices on your cars in 5 years an incentive ?
The Toyota Fraud , everybody buys into it
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I think if GM stayed off the incentives for a good 4-5 months, using that time to lower sticker prices to something that's reasonable, then the incentive age would be over. Neither Ford nor Chrysler have shown much stomach for coming up with new incentive programs, they mainly follow GM's crackpot schemes so that they can stay in business. Of course those 4-5 months would be brutal in the retail market. Low sales and low market share month after month. But that's what it would take, IMO. GM already had 2 months under their belt. I don't think they should have capitulated so soon. Now the cycle will begin once again. December will be big, and January will leave dealerships out in the cold.
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While I agree GM needs to get off the incentives, I think the smartest way to do so is keep the old stuff on them, and leave the new stuff off. The HHR and Impala were both selling very well without incentives, yet now they're going to have them? If GM would price new products right (like the HHR and Impala were) then it wouldn't need incentives, and it didn't on them. However, now that they're getting them they're going to need them for a long time now, because consumers will demand them forever if they have them once.
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Saturn isn't participating in these incentives. Last month Saturn ws the only major GM brand to year to year sales increases.
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How close are these supplier prices to invoice? to the GM employee price? I bristle at this "Red Tag" event because it prevents negotiating for a better bottom line, if that were possible in the first place. Thank goodness I am not in the market for anything right now. I would buy a Lucerne if the price was right. The trouble is that none are available locally here in the concrete jungle of South Florida. Even if they were, the dealers would be jerks right now about negotiating on one. They should sell cars to people over the internet and the dealers could deliver and service them. I am so sick at the thought of negotiating with dealers in my part of the world.
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I am so sick at the thought of negotiating with dealers in my part of the world.


Heh...I know what you mean. In the span of 30 minutes this afternoon, while it was raining (after a wonderful rain-free morning of driving my older 4 MCs), the 2 Chevrolet salesmen I was talking with regarding the Classic and impala informed me that they were leaving (one for a Ford store and the other for a dealer in another state)...and the Dodge dealer with whom I've spoken regarding the Dodge Charger told me that they don't do "dealer locates" for customers because it promotes them to check out other dealerships....

Aye.

As for the new round of incentives....kinda figured this would be coming. Hmm...maybe this means the impala will be even less for me now.....if I can find a new dealer....

*sighs*


Cort, "Mr MC" / "Mr Road Trip", 32swm/pig valve/pacemaker
MC:family.IL.guide.future = http://www.chevyasylum.com/cort/
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The supplier price is more than the employee price, so these will not be blowout prices. For instance, the LaCrosse CX has a sticker price (including destination) of $23,595. According to the article in Automotive News, the supplier price is $21,996. The employee price is $21,032. The $1,500 rebate applies to both the supplier price and the employee price. I was at the Buick-Pontiac-GMC dealer today, and all the vehicles already had the no-haggle red tag price hanging from the rear-view mirror.
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I forgot to mention that GM is giving bonus cash for employees for a few models: $1000 for the Impala, Malibu, MAXX, Grand Prix, and LaCrosse. The G6 gets $500. So that LaCrosse CX above will be only $18,532 for employees after rebate and bonus cash.
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The supplier price is more than the employee price, so these will not be blowout prices.  For instance, the LaCrosse CX has a sticker price (including destination) of $23,595.  According to the article in Automotive News, the supplier price is $21,996.  The employee price is $21,032.  The $1,500 rebate applies to both the supplier price and the employee price.

I was at the Buick-Pontiac-GMC dealer today, and all the vehicles already had the no-haggle red tag price hanging from the rear-view mirror.

[post="42720"]<{POST_SNAPBACK}>[/post]


That's why I think these red tag events are not good. A tough negotiator should be able to get a car for a few hundred over invoice anyway; with this event a good negotiator will have to pay (in the case of the Lacrosse mentioned above) a thou over invoice. This event is just to attract the lemmings that don't want to or don't know how to negotiate.
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If GM would price new products right (like the HHR and Impala were) then it wouldn't need incentives, and it didn't on them. ...........

[post="42278"]<{POST_SNAPBACK}>[/post]


I have some news for you......... they were not priced right!

I spec'd out an HHR and the MSRP came out at $20.300. The red tag adjustment
dropped the price to $19,160.

A comparably equipped '06 PT Cruiser came in @ $19,850!

So the price adjustments ARE necessary to make the vehicles competitive! :rolleyes:
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I have some news for you......... they were not priced right!

I spec'd out an HHR and the MSRP came out at $20.300. The red tag adjustment
dropped the price to $19,160.

A comparably equipped '06 PT Cruiser came in @ $19,850!

So the price adjustments ARE necessary to make the vehicles competitive! :rolleyes:

[post="43416"]<{POST_SNAPBACK}>[/post]


Amazing what a difference of $1,140 can do, isn't it? :AH-HA_wink:
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