It will be interesting to see if GM extends the promo. If so, DCX and even Ford have been reported they will be jumping on the bandwagon.

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So let's get this straight...despite huge sales increases from GM, much of their competition still managed to post better sales (or in the cases of Toyota and Nissan, much better sales). And while GM's passenger car sales stagnated, the only vehicles to really benefit were GM's trucks, which they usually have no problem selling anyway.

These kinds of numbers point to already-loyal GM customers who were going to buy GM eventually anyway coming into the showrooms while the deals were good while most of those who would have shopped around to other brands still bought other brands. This can't be good. We'll probably see GM's sales plummet when the Employee Discount program ends...

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I've seen both Ford and Dodge dealers offering 'Employee Pricing'.

Hopefully, GM has learned about realistic pricing and make the adjustments for the '06s.

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GM was desperate. Despite all of their marketing hype about their new cars (G6, Buick LaTosse, Cobore, etc) these cars weren't good enough to be noticed on their own. So, GM in their typical fashion of panic, resorts to gimmicks to move mediocre vehicles.

GM says they were surprised, but let's be real here. If you discount mediocre goods to the price where their value EXCEEDS their mediocrity, people will buy the garbage in droves. Simple lesson in marketing. Problem with GM to date is that they weren't selling the cars low enough to cross over to that line where people would hold their nose long enough to get a bargain. Heck, I'd even buy a Chevrolet if it were sold for a dollar.

The problem with this GM campaign is that the cars they are selling aren't the best in class and even if they get more of these mediocre vehicles in the hands of consumers, it isn't very good advertising for the fleet in toto. Once a friend of a Saturn Ion/Chevrolet Cobore sits in the backseat, they'll know to avoid the same mistake the friend made. Likewise for the Chevrolet Pickup which sold in droves when it was a blue light special - it wouldn't sell at sticker price or rebated down because it isn't a very good pickup. Put that antique next to a Ford F-150 and the blue light special Chevrolet looks like it came from K-Mart.

Yes, this gimmick moved lots of iron that would to this day still be collecting dust otherwise, but flooding the market place with ho hum cars and trucks isn't going to do anything for the perception of the rest of us who see mediocrity. GM hasn't put forth its best class. It has marketed down the "C" models because they had a manure load full of them. On the highways all over America will be constant reminders why the rest of us should avoid GM dealerships. Unless the bribe to buy is a permanent sales tactic, GM is in for a doozey of a reality check.

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I'll have to completely agree with Jay on the notion that customers that GM gave away their crap to, are those die-hard GM fans anyway.

But, just because I don't share the same mindset as these people who seem to prefer these type of vehicles, it doesn't mean I don't agree with GM's pricing strategy. Let's face it, GM is desparate. Since the competition has contunually proven that they can successfully sell their vehicles without having to offer ridiculous discounts (as evidenced by the significant increase in sales during the same period), GM has absolutely no other option than to lower their already rock-bottom prices. They are basically undercutting themselves.

But if that's what they have to do, so be it. Just don't expect to see a lot of improvements in their products anytime soon. With the negative profit these discounts are providing, they'd have little else to spend on R&D. But then again, they never ever were known as technological innovators anyway.

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I bought my Silverado back in May, before this little promo even started. Just for kicks, I went to the dealership last week and priced an identical truck. I paid less for my truck in May than I would have paid for it had I waited until sometime in June.

Mine stickered for $26,675 and I paid less than $19,000 OUT THE DOOR. The same truck would have cost just over $23,000 under this promotion. Can you say "Marketing Gimick"?

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>> I've seen both Ford and Dodge dealers offering 'Employee Pricing'.

This is true, though Ford's program started later than GM's and I don't think Chrysler's has officially rolled out yet. They seem to be more localized and are much more low-key. I'm assaulted with GM Employee Pricing advertisements, but I personally haven't seen advertisement one regarding anyone else's employee pricing programs.

Yet despite all of that, Ford and Chrysler sales still came out okay for June. Ford's sales have been fairly flat for a while or worse, and Chrysler has, for the most part, been posting small gains since the 300 came out. Even with GM slashing prices, none of that changed. Given these sales results, I think Ford and Chrysler may want to hold back on their programs. By heavily discounting products like that, you run the risk of yelling out, "Hey, our products are crap and the only way we can get rid of them is marking 25% off the price! Please come to our dealerships, we're desperate!" Because they've only started making moves to turn their struggles around and are putting out products people want to pay full price for because they're in such demand (Mustang, 300, etc), Ford and Chrysler can ill afford to make a move that could further dilute their brand images while they're fighting to rebuild them, especially given the very important product launches both companies have on the horizon.

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Smart shoppers who use the internet to find the best car prices have been getting favorable deals long before GM's current "employee discount" gimmick.

Some folks were gushing on this website about the great deals they were getting on the Saab 9-2: ONLY $20,000! But that car is a Subaru Impreza--a nice enough compact, but is it worth $20,000 compared with so many other good cars?

When the "Saabaru" 9-2 is discontinued (GM is famous for creating orphans), its resale value will fall like a bag of rocks.

Economy is in selection, not price.

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As far as the discounted Saab 9-2...sure, there are other nice cars in its class, but can you find another 227 horsepower all-wheel-drive vehicle with wagon utility for under $20,000? Nothing else touches it for that price.

However, I don't disagree that its resale value will plummet. That's another caveat to all these discounts being thrown around. It's not going to hold its value well at all.

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"However, I don't disagree that its resale value will plummet. That's another caveat to all these discounts being thrown around. It's not going to hold its value well at all."

True, but that only really hurts the people who paid a much higher price when they bought theirs.

Same dynamic occurs with models that have a high percentage of fleet sales, especially to car rental companies. The companies get a great price per unit, then turn around and sell the vehicles in 6-12 months - often for at least what they paid for them.

It's the suckers (ie, the average consumer) who get reamed with high depreciation.

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Does anybody else think it's strange that only a few weeks ago Toyota's CEO claimed he wanted to bail GM out, and now GM reports huge sales increases? Personally, I'm going to be watching my local Toyota dealer for suspiciously shiny "used" GM cars in its used car lot.

Side note: If you sell dollar bills for 90 cents, people will buy them and you will lose money. It's not amazing to me that GM increased its market share by selling cars below cost. What's amazing to me is that they'd try.

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Succinct but nothing new:

http://www.just-auto.com/news_detail.asp?art=48643

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iQuack: Yes, the 9-2x Aero IS worth $20,000 compared to all the other cars in it's price range. What $20k car would you suggest that has AWD and a turbocharged 227 hp engine? I don't know of any.

As for resale value, who cares? I didn't buy the car as an investment.

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The GM Employee Price deal is back through August 1st...

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Give GM credit. They have a hit on their hands with this marketing effort. Will allow they to move right into the competative pricing on the 2006's. Would be even better if they moved into the haggle free Saturn pricing.

Also, the big sales numbers on SUV's and pick ups only confirms that GM was right to move up the 2007 GMT 900 trucks into the spring of 2006.

I predict that the new Silverado, Burb and Tahoe are among the 10 best sellers when introduced.

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Ya know, it's amazing when we talk about resale value. Those of us who trade often, yes, it's a concern. Those who do not and drive the damn thing until it won't drive anymore geuss what, it does not matter 1 iota.

So what if GM sold to the same old crowd? It moved iron and the other makes had some spinoff.

Then we have the complaints tha GM has never been know as an inovator? Better read some history books, maybe not recently, but the heritage is there.

And guess what? While all the negtives were huddling around in a corner, GM actually sold some cars and increased market share.

Yeah, they're dumb all right, care to guess how they made out on financing or the dealers did on add-on sales? Try to argue with that.

You know, during the height of GM garbage making I bought an 84 Caprice 2 door, 231,000 miles and a paint job later it still runs great has the original interior , 1 dash pad replaced from cracking. The car is about 90% original parts.

Do I care about resale value? Hmmmm 21 years later? I think not.

Of course the body fit is poor.

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>>So what if GM sold to the same old crowd? It
>>moved iron and the other makes had some
>>spinoff.

The problem is, the same old crowd has shrunk by close to 50% over the last 30 years. All GM seems to be able to do is sell to the same old crowd which is diminishing rapidly, and they're not providing many convincing arguments for the customers that they've lost to Toyota, Honda, etc, to come back to GM. If all they did was get the customers who were going to buy their cars anyway to buy their cars, they accomplished nothing. Instead of selling their cars over the next several months, they just sold them all in one month at far below invoice and lost money in the process. And they further reinforced the idea that their cars aren't worth buying at regular price, and only worth buying if heavily discounted.

>>Then we have the complaints tha GM has never >>been know as an inovator? Better read some >>history books, maybe not recently, but the >>heritage is there.

GM comes up with some great innovations, to be sure, but they haven't consistently put out great world-class product in a long time. The average consumer doesn't care that GM sold great cars 40 years ago. Much of the car buying public wasn't alive then. They only care about who's innovating now, and who has a well-thought-out innovative product ready for their hard-earned dollars right now. Their generations-old heritage matters very little. They've earned a very different kind of heritage over the last 30 years, one that's not very positive.

>>Yeah, they're dumb all right, care to guess >>how they made out on financing or the >>dealers did on add-on sales? Try to argue >>with that.

Okay. This is a two-part proof, though we won't see the 2nd part of this until down the road when GM halts their discount program.

If we look at a Chevy Tahoe 4X4 LS, on Chevy's website, it's $40,565 before the discount, and $31,315 after. Simple math says a 6% APR loan on a $40,565 is going to generate more interest revenue than a 6% APR loan on a $31,315. That's part one. Part two is the big question we don't have answer for yet...what happens after this discount ends? If GM is just selling to the customers they were going to get anyway, then likely their sales are going to plummet when the discount ends. If for example 1 million loyal GM customers were going to buy cars this year, and they all decided to do it during the two months the program is there for, then yeah sure, they sold to a million people in 2 months, but then there's nobody left to sell to afterwards. They sold to all of their potential customers, and that will cause their sales to plummet. Which means they're no longer making money off of financing the rest of the year, and the money they did make during those 2 months of cheap deals is far less than they would have made if they kept things at regular price and spread it out over the remainder of the year.

If that happens, then yes, GM was indeed dumb, because they lost out on all the finance revenue they could have made. Now if they managed to bring in a whole bunch of new customers as a result of the discount, then yes, this will pay off for them. But as it's already been established, it doesn't look like it's happening.

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I own GM stock and have had some very good GM cars in the past.

Our family had mostly GM cars when I was a kid a LONG time ago. GM offered the best cars available in the U.S. after World War II.

But GM lost its way under that awful ninny, Roger Smith, and hasn't yet recovered.

When I went shopping for a mid-sized sedan a couple of years ago, GM had absolutely nothing to compare favorably with the Mazda 6, Toyota Camry, Honda Accord, etc.

I really wanted to buy a GM car and waited for the introduction of the disappointing Saturn ION. GM didn't have a car I wanted to buy, so I bought the Honda Accord with no regrets.

How many other people have done the same thing?

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# 17 While I sort of agree with your statements the 50% loss is actually not a complete loss. Why? Becuase the number of cars and makes has diluted the market. There is no way any maker can hold 60% of the market as GM did through the 60's and early 70's.

The problem with GM is they move at a snails pace compared to other makers, always have.

On the financing keep in mind, now they have all your info GMAC home financing will be mailing to you shortly with great home financing. How many takers? GMAC Home is rapidly increasing it's share, so 1 million new cars 1 million new other loan possibilities.

Then there are the bragging rights for number 1 in sales, always good for more business.

Don't get me wrong, I'm not a big GM supporter even though I've bought many over the years. For my personal use I've bought German imports for years.

While I think this promotion has worked well, it also has some holes in it. I posted elswhere about GM on this that the true salvation is if they value price their equipment after this, otherwise, they may have to do it all over again. All the domestics have to get off the rebate----whatever train to bring value to their product.

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So how do we truly know we are getting the GM Employee discount. What is the true employee discount.

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