GM: Employee Pricing for All on '08 Models, Some '09sBy Michelle Krebs August 19, 2008
DETROIT - General Motors announced Tuesday it is offering employee pricing on nearly all 2008 models and some 2009 models in stock from Aug. 20 through Sept. 2.
GM is billing it as its 100th Anniversary Sales Event; the automaker celebrates its centennial officially on Sept. 16. But the fact of the matter is, GM needs to boost sales, which were down 18 percent for the first half of this year. "Desperate times call for desperate measures, and that's what we're seeing from GM," said Jesse Toprak, Edmunds.com's executive director of industry analysis.
"We have 100 years of innovation behind us, but what's ahead is even more exciting," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. "To celebrate, we're offering the employee discount to everyone on our 2008 and some of our 2009 models. This is a phenomenal offer for consumers."
Indeed, agrees Edmunds.com's Toprak, it's a good deal for consumers, but it's good for GM as well. "From GM's perspective, it's key to clear out the (2008) models before the '09's start to roll out," he said.
Toprak noted that GM's last round of employee pricing offers in 2005 worked because they eliminated customer uncertainty about negotiating a good price. Employee discounts are below the invoice amount dealers would normally pay.
GM is quick to note, however, that a major difference between this employee pricing deal and the one offered three years ago in that the automaker's inventories are significantly lower. GM has 747,000 vehicles in stock, 201,000 fewer than the 948,000 it had when it offerd employee pricing the last time.
GM already is spending heavily on incentives. Edmunds.com's analysis puts GM's July Total Cost of Incentives, Edmunds' proprietary calculation of all incentives adjusted for sales volume, at $4,063 per vehicle sold.
At the same time, GM told dealers Monday it is cutting back lease incentives on new GMC, Buick and Pontiac vehicles. In fact, the only lease incentive to be offered by GMAC, the finance arm in which GM owns an interest, is on the Pontiac G6, the Detroit News reported. The paper said the narrowed leasing incentives start Wednesday. It is unclear what kind of leasing deals GM will support for other brands, although GM executives have said it would continue to be competitive with specific brands and models as well as in geographic regions that heavily favor leasing.
Details of the employee pricing promotion, available on GM's Web site, are that customers get employee pricing on virtually all remaining 2008 model year vehicles in stock. The 2009 model year vehicles also eligible for employee pricing are the Chevrolet Cobalt and HHR, Pontiac Vibe and G5 and Cadillac CTS.
Special stickers will be in vehicle windows at participating dealerships that show the bottom-line price customers will pay, taking into account the employee price and all applicable incentives and rebate offers.
The deal excludes 2008 model year medium-duty trucks and other 2009 models that are out.