Filed under: Products and services, General Motors (GM), Marketing and advertising
General Motors Corp. (NYSE: GM) will offer customers wanting to purchase its vehicles the same discounts as employees for another four weeks, according to Bloomberg News.
The incentives, on most 2008 and some 2009 models, were to have expired today but, according to Bloomberg, “GM will continue the deals through the end of the month because the initial two-week offer boosted sales.”
Of course, this is great news for consumers, particularly the few who are confident enough in their economic circumstances to be in the market for a new automobile. Maybe it will encourage people leaning toward a Honda (NYSE: HMC) or some other foreign automaker to give GM a second look or even a third one. Chances are, though, it won’t do much to help.
As my colleague Michael Rainey noted earlier, imports accounted for 68% of all passenger car sales in the U.S., a new low for the Big Three. These are the automobiles that consumers stung by high gas prices are most interested in purchasing. Good luck in trading in your gas-guzzling SUV for a fuel-efficient hybrid. Many dealers are reportedly no longer interested in the massive cars because their trade-in value has plummeted.
Overall, though, this is bad news for the company that for now is the world’s largest automaker. GM and the other makers need to load up each automobile with so many incentives that their profit margins are continuing to erode. The problem with this strategy is that once you begin it, it’s difficult to halt.
General Motors probably will have to continue its employee pricing marketing program through at least the end of the year. Even then, it will not do the company’s shareholders, who have seen their holdings decline more than 57%, much good. The automaker, though, has little other choice because its problems are so massive.
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