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GM's new lure: Low sticker prices

GM's new lure: Low sticker prices. Tyler Redden Article. GM calls it "value pricing,". The “once-in-a-lifetime” deal -- a discount plan that allows the general public to buy GM cars or trucks at the employee price. GM wants to get people away from the concept of a big monthly deal.

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GM's new lure: Low sticker prices

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  1. GM's new lure: Low sticker prices Tyler Redden Article

  2. GM calls it "value pricing," • The “once-in-a-lifetime” deal -- a discount plan that allows the general public to buy GM cars or trucks at the employee price. • GM wants to get people away from the concept of a big monthly deal. • what-you-see-is-what-you-get

  3. New Strategy • Instead of high prices w/ huge incentives now car buyers get the low sticker price. • Growing number of consumers who do their auto shopping on the Internet. • GM: turn around North American operations, which lost $2.5 billion in the first half of 2005.

  4. Risks - Rewards • Customers are used to the monthly incentive deals. • GM Employee Discount plan captured 30.3 percent of the retail new-vehicle market compared to 25 percent a year ago. • GM a 41% increase in its June sales

  5. Competitors Movements • Ford and Chrysler copied the employee-discount plan. • Initially GM planned to end the plan on Aug. 1st, now will continue through Sept. 6. • GM and Ford to cut 2006 prices.

  6. Competitors Movement • GM's retail sales increased 42 percent in the first 15 days of July, while Ford's jumped 27 percent and the Chrysler Group saw an 11 percent hike. • Toyota Motor, American Honda and Nissan Motor have all lost market share. • But, they are all still showing a sales increase

  7. Future impacts • High sales numbers may lead to sub-par sales figures when the 2006 models are released. • Prices on used vehicles may drop as discounts on new cars lead to massive amounts of trade-ins • A used car lot had 410 used cars, up from the usual 250. • 60% of new car buyers generally trade in their current vehicles. • SSR

  8. Sources • http://www.freep.com/money/autonews/gm28e_20050728.htm • http://money.cnn.com/2005/08/05/Autos/used_cars/index.htm • http://www.jdpa.com/news/releases/pressrelease.asp?ID=2005081 • http://www.detnews.com/2005/autosinsider/0507/25/D01-256986.htm • http://www.jdpower.com/news/releases/pressrelease.asp?ID=2005093

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