GM considering new incentives like, but not exactly like, Hyundai Assurance program
General Motors' sales for the month of February dropped by a gut-wrenching 53% versus February 2008, giving the General plenty of incentive to kick up, well, incentives. GM knows it has to do something more than the typical cash on the hood, 0% financing marketing initiatives, and it has looked at the Hyundai Assurance program for inspiration.
GM executive Mark LeNeve told Automotive News his company recognizes that the Hyundai program may be addressing sagging consumer confidence, but he doesn't like the fact that losing your job means you also lose your car. LeNeve also stated that he isn't sure the Hyundai Assurance program is the main reason that the Korean automaker's sales were up 14% for January, stating that a portion of the increase could be the result of deep discounts on 2008 models.
Then again, Hyundai had the third lowest decline in February of any major automaker, showing that its improved product lineup is likely being helped by clever incentives. For now, GM isn't divulging much in the way of details about its new incentive plans, but for the short term plans on extending its Presidents Day sale into March. Times may be tough right now, but it looks as if more automakers than just Hyundai are preparing creative incentive programs to move their metal.
[Source: Automotive News, sub. req'd | Photo by Justin Sullivan/Getty]
Get a WordPress.com Blog
_opt_thumbnail.jpg)
_thumbnail.jpg "2011 Audi A8: Live from Miami")
Reader Comments (Page 1 of 2)
TriShield 11:45AM (3/04/2009)
If they were smart those incentives would be the same assurance program for a car return as well as offering the same 10y/100,000m coverage the Koreans do to build trust in their products. That's something GM desperately needs.
Reply
Ligor 12:01PM (3/04/2009)
I second that
yet I think that it will not help as much
Hyundai Kia sell only 40k cars/mo, so it's a bit easier to get another 5k customers in, and that would change your % a lot.
but we'll wait and see
Sea Urchin 1:25PM (3/04/2009)
How about increasing warranty to 12 years, to stand out? Or Lifetime like Chrysler?
caddy-v 1:46PM (3/04/2009)
Since most Americans keep their cars for less than 4.5 years, that 10/100,000 mile warranty is useless for 5.5 years. It's not transferable. One of the main reasons Hyundai's resale value is just as bad as Chrysler's. GM's warranty is transferable, but in this economic climate does little to help resale.
One question that puzzles me. Hyundai's "lose your job assurance" programs sounds pretty good in the adds, but, if you loose your job and have to turn your car in, how in the hell are you going to go out and look for a job or go on interviews? In this job climate it takes three to six months on average for a blue collar worker and six to fourteen months for a white collar worker to find a job. Seems to me the only favor Hyundai is doing is saving time and money it costs to repo a car.
And to top it off, you still have to pay the difference of what you owe and what the car's value in NADA.
GM, if your listening, offer a grace period from the time of job loss up to one month after resumed employment up to six months. Put those six months at the end of the loan interest free and I'll bet you'll see crowded showrooms again.
BigWill 2:58PM (3/04/2009)
In a really tight credit market, not having a reposession and a judgment (for the amount you still owe after the repo) on your credit report is a big deal.
XJ 3:02PM (3/04/2009)
caddy-v:
I'm sure most people would rather have Hyundai's warranty over GM's... Transferable of not, 100k for 10 years is better than 100k for 5 years at time of purchase. You never what'll happen in 5 years that may force you to keep your car more than 5 years. And there are a lot parents out there who may no longer drive the car, but hand it down to their kid. They can even even transfer it to them and still keep the 10-year warranty. Also, bumper-to-bumper warranty is 5 years for Hyundai vs only 3 years for GM. It's really a no-brainer.
Hyundai program allows you to keep your car for 3 months without payments before you're faced with the decision of handing back the car. I doubt any automaker will go as far as 6 months (but kudos to GM if they do). Hyundai also buys back the car with no penalties up to $7,500 in depreciation. No Hyundai will depreciate by $7,500 after its first year, less some of their very high models and trims (or if someone is stupid enough to pay MSRP on a car these days when 99% of all cars don't justify it). Despite what you may believe, Hyundai resale value is better than Chrysler. And I'm willing to bet it's as good (or bad I should say) as Ford and Chevys, if not, better.
J.Crew 8:37PM (3/04/2009)
Chevrolet has started offering 3 years free mantenance, 2 years of Onstar, and 2 years of XM included in the purchase of all models up in Canada.
http://canada.shoplocal.com/storead.aspx?contentretailerid=8343164&storename=Chevrolet%20GM%20Canada
TKE 11:55AM (3/04/2009)
Laneve might be right, perhaps it had nothing to do with the slightly risky but brilliant Assurance program. After all, without the Assurance deal in Canada where most automakers posted sales losses (http://goodcarbadcar.blogspot.com/2009/03/canada-auto-sales-february-2009.html), Hyundai saw a huge 29.8% increase. Perhaps it's product that sells cars? Don't ignore the fact that Hyundai sold more cars per day this year than last in America, as well.
Reply
Andrew 12:02PM (3/04/2009)
the caption said it best..... who wants to buy from a potentially bankrupt company. Besides the die-hard "buy american" fans, who is going to sink so much money into a company that may not be here tomorrow. While I admire patriotism, its another to be xenophobic. If you aren't native american, you don't have the right to complain about LEGAL immigration.
Reply
Curtis 12:53PM (3/04/2009)
For some reason Autoblog didn't attach my reply to your comment. Refer to the comment by myself further down the page.
bill jackman 12:08PM (3/04/2009)
I think it's pretty simple: Hyundai has been in front of Congress for a bailout loan, and Hyundai hasn't been in the news every day teetering on the brink of bankruptcy. The Assurance program was a great move for Hyundai, as was coming into their own on a decent lineup this year.
Reply
bill jackman 12:08PM (3/04/2009)
Corrected: Hyundai HASN'T been in front of Congress!
Reply
Rainy99 12:09PM (3/04/2009)
Hyundai's program really shows the fear in the marketplace right now. People can get loans, and they can buy cars... but are scared.
Interesting program, but it seems a bit risky...
The word balloon made be lol.
Reply
Gardiner Westbound 12:23PM (3/04/2009)
Instead of incentives GM should put its money where its mouth is, a 10-year bumper to bumper warranty without weasel clauses.
Eliminate "normal" from warranty administrators' vocabulary. Piston slap, NorthStar engines spraying oil, short-lived intake manifold gaskets, windows falling into doors, stub frames rusting through; malfunctioning computers, seized a/c clutches are not normal. This will be a wrenching adjustment for the bunko artists now running the store. Fire dealers found 0mistreating and cheating customers selling unneeded services.
It's worth a shot. What GM has been doing for the last 30-years isn't working out very well.
Reply
MikeofLA 12:27PM (3/04/2009)
Here is the problem... They really believe that Hyundai is haveing an uptick in market share and sales because of deep discounts and not due to better products with great value... That is GM's problem, they think in those terms. Had they been thinking "If we built great cars with great value we'll see a sales increase" instead of "lets throw some cash on the hood and sell the same crap we've been producing for 35 years" they wouldn't be in this mess.
They still don't get it.
Reply
BluePariah 12:49PM (3/04/2009)
Agreed, and its not like every other automaker (save maybe Mini) didn't also have "deep discounts" on their 08 models - its a natural part of the sales cycle and even in good times they discount the previous model year to make way for the new.
alex 1:57PM (3/04/2009)
yes all companies are offering heavy discounts... but Kia tops the industry: http://freep.com/article/20090304/BUSINESS01/90304061/Chrysler++Kia+tops+in+incentives
When you figure the average msrp of a GM, Toyota, Honda, etc vehicle is higher than the average msrp of a Kia, it means that for Kia to be offering the most $$$$ per car (and by quite a lot), they are discounting their vehicles at a MUCH MUCH higher % than other companies.
P.V. 6:26PM (3/04/2009)
That's very true. The only products going for them right now are the Cobalt SS, CTS, Enclave, and G8 (not even the Malibu, IMO). Hyundai, on the other hand, has a far larger portfolio of desirable cars; this IN COMBINATION with the Assurance program is really helping Hyundai. Note to GM: you can't succeed by having one without the other (other more important than one, in this case).
JB 12:35PM (3/04/2009)
Hyundai is ALREADY in Phase II with Assurance+ AND STILL NOTHING FROM THE BIG 2.5 or anyone else??? Subsidies don't create desire and hunger to grow, they create complacency.
Hyundai/Kia is hungry for market share and CEO Krafcik knows the Koreans won't tolerate 30-40% declines so, they sit down and come up with solutions.
GM and Chrysler should fail, what with their inability to respond to market conditions. Things won't change until failure wakes them up. But we wouldn't want anyone to fail would we??
Reply
bill jackman 12:45PM (3/04/2009)
I do have to say that I love the wheels on the black Malibu in this post. It's a pretty sweet looking sedan.
Reply