This summer, GM says it won't get 'desperate' for sales
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This summer, GM says it won't get 'desperate' for sales
Toughing it Out
This summer, GM says it won't get 'desperate' for sales
By JAMIE LAREAU | AUTOMOTIVE NEWS
AutoWeek | Published 05/23/06, 2:33 pm et
http://www.autoweek.com/apps/pbcs.dl...1/TOC01ARCHIVE
This summer, GM says it won't get 'desperate' for sales
By JAMIE LAREAU | AUTOMOTIVE NEWS
AutoWeek | Published 05/23/06, 2:33 pm et
DETROIT -- General Motors executives are determined not to become "desperate men" doing "desperate things" this summer to move metal.
The automaker plans to hold to its strategy of lower sticker prices that are closer to the actual transaction prices. It will not rely on big summer blowout programs to boost market share and support sales, say GM's Robert Lutz and Mark LaNeve. Lutz is vice chairman and vice president of global product development. LaNeve is vice president of vehicle sales, service and marketing.
GM doesn't want to repeat last summer's experience, when the employee-pricing incentive spurred massive sales -- followed by a brutal payback of slow fall sales.
"We're not looking to do a big GM incentive program but want to go to market by brand on the strength of the products," LaNeve said in an E-mail.
GM will continue to be competitive in leasing, loyalty and conquest programs, LaNeve said. He added, "We will not let competition run away from us on aggressive merchandising during the summer sell-down."
In a recent interview with Automotive News, Lutz characterized a big blowout incentive sale as "the old 'desperate men do desperate things.'"
"We really want to tough it out," he said.
Lutz said North American executives are "absolutely determined to do whatever it takes" to make GM's resale values healthy. That means not relying on incentive blowout sales or daily rental-fleet sales to prop up market share.
"Anytime we pull all those triggers, we could probably have a 32 percent market-share month," Lutz said. "But nobody wants it anymore because we know the long-term damage it does.
"So many people -- before they buy a car -- they go to sites like Edmunds.com, and they look at the cost of ownership. If they see a GM or any domestic brand that's priced $1,000 under the Camry but, guess what, the first two years you lose $3,000 (in residual value), the guy doesn't have to be very good at math to realize he's better off paying the extra $1,000.
"The only way to solve that is to stop performing unnatural acts in the market. We just have to be patient."
The automaker plans to hold to its strategy of lower sticker prices that are closer to the actual transaction prices. It will not rely on big summer blowout programs to boost market share and support sales, say GM's Robert Lutz and Mark LaNeve. Lutz is vice chairman and vice president of global product development. LaNeve is vice president of vehicle sales, service and marketing.
GM doesn't want to repeat last summer's experience, when the employee-pricing incentive spurred massive sales -- followed by a brutal payback of slow fall sales.
"We're not looking to do a big GM incentive program but want to go to market by brand on the strength of the products," LaNeve said in an E-mail.
GM will continue to be competitive in leasing, loyalty and conquest programs, LaNeve said. He added, "We will not let competition run away from us on aggressive merchandising during the summer sell-down."
In a recent interview with Automotive News, Lutz characterized a big blowout incentive sale as "the old 'desperate men do desperate things.'"
"We really want to tough it out," he said.
Lutz said North American executives are "absolutely determined to do whatever it takes" to make GM's resale values healthy. That means not relying on incentive blowout sales or daily rental-fleet sales to prop up market share.
"Anytime we pull all those triggers, we could probably have a 32 percent market-share month," Lutz said. "But nobody wants it anymore because we know the long-term damage it does.
"So many people -- before they buy a car -- they go to sites like Edmunds.com, and they look at the cost of ownership. If they see a GM or any domestic brand that's priced $1,000 under the Camry but, guess what, the first two years you lose $3,000 (in residual value), the guy doesn't have to be very good at math to realize he's better off paying the extra $1,000.
"The only way to solve that is to stop performing unnatural acts in the market. We just have to be patient."
#7
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damn amercian car company, lol. Really they should be quite about what they are thinking because i dont see how a press release like this could help. It kind of makes me think, wow these guys cars suck so much they cant make anything off them. Meanwhile a high end luxury company can jack up their price and still get people to buy them because they are good quality and people want them.
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Their high paid Exec's couldn't predict the long term effects of their "employee pricing" and other crazy offers? Unbelievable. I can't beleive they had to find out the hard way. I bet anyone of us on this forum could run GM better than it is right now.
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I agree with those who wonder what the point of a press release like this could be. One thing that comes to my Machiavellian mind is that Lutz is publicly asking Ford and D-C to start the crazy incentive war this time so GM won't have to. They even put that statement in that they'll be "competitive when it comes to incentives" meaning they'll match whatever the other guys do. That way they can just shrug their shoulders and claim that THEY'RE not the ones who are desperate, but they simply have to keep up with the incentives to be competitive, blah blah blah...
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