Filed under: Car Buying, Trends
GM offers rebates in addition to employee pricing
This is quickly becoming a price war, with GM having announced it will offer cash rebates on many 2006 and 2005 cars
and trucks, in addition to the employee pricing it already offers on nearly every 2005 model. The rebates range from
$500 to $1,000 on the 2006 models and up to $3,000 on remaining 2005 models.
GM is leading the way in creative pricing, but is it working in the way it was designed? Is GM's current strategy
increasing sales by bringing the price of its lineup more in line with its perceived value, or is this strategy really
causing consumers to consider what the General has to offer who otherwise wouldn't? We're wondering specifically if
those people who would never consider buying a GM vehicle would do so now. Anybody in that camp care to
comment?
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Reader Comments (Page 1 of 4)
Paulie 11:05PM (12/18/2005)
There are exactly 2 GM cars that appeal to me - the Solstice and the Corvette. Even if GM put huge discounts on either of these cars, it still would not be enough to get me to switch back to a domestic. After a rough ride through the late 80's and the 90's, I've completely sworn off anything by the big 3.
Someone could come to my house, hand me the keys to a GM vehicle, and I'd have it up for sale the next morning.
Until the resale value and quality of build can match an import, I just can't get behind it. And now, with most Japanese brands being built on-shore, I don't feel so bad about it.
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Steve 11:05PM (12/18/2005)
Hey guys, it's a Dutch auction. GM keeps lowering its prices until price equals perceived value.
Of course, GM and Ford both have been losing money on the manufacturing side, while their finance subsidiaries have made tons of money.
So, if manufacturing has been lsoing money at higher prices, how can lowering prices result in increased profitability?? Hmmmmm.
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zak 11:05PM (12/18/2005)
Boy, does ANYONE ever get tired of GM-bashing. Take note, the quality HAS come up. The resale value HAS come up. The designs have never been better. Admittedly, GM product in the past has had some issues. The new lines from all divisions are GREAT. Anyone who would make a blanket statement that they would never buy a product from a company because they had problems 10-20years ago needs to wake up. By the way check the new recalls form Toyota, Nissan and Honda. Does that mean that you'll never buy an import 10-20years from now? Lastly, just because avehicle is manufactured in the states doesn't mean that the bulk of the profits aren't going back overseas!
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Brad 11:05PM (12/18/2005)
GM's price moves (now along with DC and Ford) have me looking at vehicles I wouldn't otherwise have considered. It's not a matter of now I think they're priced consistently with their worth, they're just becoming good enough deals that I may as well have a look. If a GMC Envoy surprises me on the test drive enough to make a deal over a 4 Runner or Pathfinder, kudos to GM. I doubt it, though, based on enough examining of details at auto shows (seats, dash layouts, interior materials quality). It's still the details that are killing the domestics. Read reviews on the new Chevy Cobalt...everybody is talking about how GM is finally stepping up and putting quality materials into a vehicle. That's one. How about the rest? Likewise DC and Ford. The Five Hundred is getting better reviews in that area, as is the 300/Magnum/Charger, but they still get hit with comments on cheapness of materials and execution not in line with the cars' cost or position (see also the Vette). I have no doubt that they are improving the dynamics and overall quality of the cars, and now maybe the price points are more in line with their worth. But I think it is the deal that is simply getting people's attention.
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Dan 11:05PM (12/18/2005)
I think the only thing the Big Three don't have going for it at this time (besides fiscal security) is the resale value of its cars.
People can go on and on with anecdotal evidence about how their such-and-such's transmission died or whatever, but those stories are worthless as a whole. Fact is, GM and Toyota are at the top of the quality charts. GM's vehicles don't fall apart. GM's transmissions don't die (which is why BMW buys them), and GM's engines don't either with proper maintenance (AND no sludge!)
The only thing GM has left to fix is resale value, and this sale certainly will NOT help that. As time passes and public perception falls more in line with reality, so will resale values.
But will GM's resale values go up, or will Toyota's fall down? I mean, for anyone in the lightly used car market (2-3 years old), a Toyota or Honda is not desirable. A lot of times, a new vehicle can be had for little more than the price of a used import. So while I think GM's resale values will come up in the long run, I think we'll also see Toyota's and Honda's fall (not that that's a bad thing).
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dan acre 11:05PM (12/18/2005)
GM does not have naything owning. The cars are bland! The styling is DULL! The power plants are 25 years behind the times and the company is run by (???) with no vision nor imagination.
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Sid Ghosh 11:05PM (12/18/2005)
What do you drive, Dan?
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Dan 11:05PM (12/18/2005)
Sid, I currently own a 2001 Impala.
I worked for a Chevy/Cadillac dealership and then a Nissan/Jeep dealership. I drove an 05 Altima for several months and it was a beautiful car with lots of small features that leave me wishing my Impala had (telescoping steering wheel, etc).
But, I recently got a job with a dealership management solutions company (software for dealerships) which requires a lot of travel. I had to pick a car that would be low on repair costs, low on fuel costs (as I'd be reimbursed per mile). I'd love to have bought an Altima, but none were affordable in my price range. My Impala is a wonderful car with best-in-class fuel economy.
I may be a bit biased, but I'm not a loyalist. I'd drive an import if the opportunity presented itself, but I'm certainly happy with my Impala.
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Sid Ghosh 11:05PM (12/18/2005)
Opps, sorry I meant dan acre:-) I should have been clearer.
As for myself, I personally think all companies today offer excellent cars. I love some of the domestic cars and I also love the Acuras, the Mazdas, a few Toyotas such as the awesome 4Runner and the Matrix. I like the Honda Accord Coupe and the Ridgeline.
But I still wish for better styling from Toyota and Honda. Toyota appears to be working towards that end.
Really, I don't have a targeted 'import/domestic' thing. If a car is good and attractive, I'm game. If I had the money, I'd be driving a Acura TL right now:-)
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Roger 11:05PM (12/18/2005)
I just bought a Chevy Trailblazer because of the special. I have never owned a domestic vehicle and had this promotion not been going on we would have purchased an import. I saved more than enough to decide to take a chance on a Chevy product.
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Dan 11:05PM (12/18/2005)
Ah, sorry.
If I had the money (and maybe quite a bit more than the Acura), I'd be driving the Velite Concept. ( http://motortrend.com/future/concepts/112_0405_first_velite/ )
But seriously, I do think that GM's definitely in better shape than it was even a couple years ago with public perception (which is much harder to fix than actual quality). As long as the Cavalier is no longer on Chevy lots, it can only go up!
And take a look at http://www.gminsidenews.com/forums/showthread.php?t=16182 . If those really are the engine choices for the 2007 Silverado, it looks like GM might be on a roll.
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hermitizer 11:05PM (12/18/2005)
Your comments: Well, I can sort of comment on this.
In July, when my wife's lease on her Jetta was up, we looked around for a replacement (VW New Jetta/Passat, Volvo S40, or used A4). On a whim, we walked over to the Saab dealership, she wasn't thrilled with the 9-2X because of the interior (and yes I wanted the 9-2X Aero) and I assumed the 9-3 was out of our price range.
I happened to ask the salesperson about what kind of price I would be looking at w/an employee discount which I was able to get through my grandfather's wife. We ended up with a lease a 9-3 Linear which has an MSRP of over 30k when loaded for the same price we were paying on the old Jetta.
If it weren't for that employee discount, it wouldn't have even been a consideration. I'm no GM fan or hater, but you can't argue with the deals they are handing out. Do I love the Saab? Nah. But my wife does. Will I consider a 9-2X Aero when I need a new car? Probably...unless of course by that time, everyone is offering employee discounts, then it all becomes moot.
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Joel A 11:05PM (12/18/2005)
Were wondering specifically if those people who would never consider buying a GM vehicle would do so now. Anybody in that camp care to comment?
When I was shopping last year, none of the domestics crossed my mind. But I had one, literally, big problems with all the three cars under my consideration: Camry, Accord, and the Mazda6: I couldnt fit in them with the way I sit in cars with sunroofs.
My friend suggested domestics. I tried the G6 and the Lacrosse. I discovered the height-adjustment feature of the former and I suddenly was able to fit. I had no such problem with the Lacrosse.
At the time, the G6 was priced a little over 25k for the GT version. I later checked on-line and discovered the price that was roughly comparable to a 4-cylinder Accord. The Lacrosse CXS was overpriced in comparison to its benchmark, the Lexus ES. So the G6 was a better value.
Resale value and all that jazz mean diddle-squat since I keep my cars until they break down. (My previous car was a 1996 Dodge Neon which I gave up to charity last year. Its still running, by the way.)
My point? While I applaud the current price wars by the Big 3 Domestics, price is not always the primary consideration. Looks, features, and that intangible gotta have plus the already mentioned resale value, come into play in many consumers mind. Best evidence for this is the fact that Toyota, Nissan, Hyundai (!) and Honda have made solid gains despite minimal rebates. GMs pricing strategy affected those who look at domestics first which is the reason DCX and Ford reacted.
Ill still be looking at domestics when its time to buy my new car. (I took my spouses car instead.) But I want value, not just the latest rebate. And if reports continue about the domestics improved quality, Im going to have a lot of choices.
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djbango 11:05PM (12/18/2005)
The GM bashing is out of control....if I had a Matrix and a Pontiac Vibe side by side. Most people would pick the Vibe because of better quality, and an advance engine, not knowing they were the same car for the most part.
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laserwizard 11:05PM (12/18/2005)
Honestly, GM has so few vehicles worth considering that bringing the price down is irrelavent. I look across the new releases of 2005 models and they are all flawed in significant ways. Cobalt has no interior room particularly in the back and suffers from being non-descript from exterior styling. It may be improved over the Cavalier, but who really cares?
The LaCrosse is plain ugly with a carp front end that merely gives the bland exterior styling a focal point on which to heave one's lunch. The interior is not as roomy as the competitions' and is certainly not a vast improvement over the cars it replaces.
The First Ever G6 was a half baked model from the beginning with the world's largest automaker unable to bring out a coupe, a convertible, and a 4-door model all at the same time. This is from a company who used to revamp its entire lineup each year in the 1950's and 1960's. Add to the failure of Private Motors to get the models to the people to buy, the car is simply dull looking - awkward from the front with frog eye'd headlights and a shape that goes unnoticed.
I gotta tell you that GM offers far more sizzle in its marketing than it does with their cars. I suppose if they drop the car prices to a dollar people will suddenly switch brands that they were intending to buy, but the models covered by the Massive Buyer Bribe simply aren't worth the effort to purchase.
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KRS1 11:05PM (12/18/2005)
My only gripe with GM is how they love to kill car names. No offense to Dan, but the 2000+ Impala should not be called an Impala. Same with the new GTO. I know there's more examples too. I guess they do it to sell more models b/c of name recognition but that just really annoys the crap outa me. I just feel like the are tarnishing the names of the old models. If you are going to resurrect a legendary model like that you have live up to it with the new one. Just my opinion though.
Oh and Civic > Corolla > Mazda3 > Cobalt :P
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laserwizard 11:05PM (12/18/2005)
A reminder to ZAK. While all of the things you say aren't completely factual, one thing truly is...GM's recalls are way up. In 2004 it was so bad that they recalled more cars than they built.
It isn't bashing GM to point out the FACTS. The styling hasn't improved - it has disappeared. Nothing GM has on the market right now except for the Corvette is stunning. GM has had no hits in the last decade that anyone can point to as a "must have". Even the Solstice pre-orders are less than the Mustang's monthly sales rate.
GM created its own mess and some of us are more than happy to report it for the rest of you to enjoy.
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DomesticForMeNot 11:05PM (12/18/2005)
I would never, ever, consider a domestic car. There are just way too many good cars out there. GM, et al, can put as many thousands of dollars of incentives on their crap and it still wouldn't get me to walk on their lots.
To those of you that *think* GM (domestic) build quality and materials are up to import levels, you're free to feel this way, but to my critical eye they are nowhere near. Bland styling, cheap plastics, poor attention to detail, etc... Too many other better choices out there folks.
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Sid Ghosh 11:05PM (12/18/2005)
No way, KRS1;-)
Mazda3 > Corolla > Civic > You
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DenverKen 11:05PM (12/18/2005)
I think one of GM's problems is TOO MANY MODELS! Do we really need 6 to 10 models from each brand? All this does is make each brand stand for nothing in particular.
I think GM could again stand for specific things in the consumer's minds if each brand picked ONE attribute. Chevy - value, Pontiac - sportiness (no minivans!), Buick (affordable luxury), Cadillac (best of class engineering and undeniable luxury), Saturn - like an import but more affordable, Hummer - well, they are the ONE GM brand that actually stands for something, although I'm not sure it's the right thing for the moment.
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