DETROIT -- General Motors is starting a national incentive program to run through Jan. 3 despite claims that it would hold to its value pricing strategy.

The program, called GM Red Tag Event, starts Monday, Nov. 14, auto dealers say.

A GM spokeswoman declined to comment on Friday, Nov. 11.

Under the program customers can get any 2005 or 2006 Buick, Pontiac, GMC or Chevrolet car or light truck at the supplier price plus $100, several dealers say. The exceptions to the sale are the Pontiac Solstice, Chevrolet Corvette and new Buick Lucerne, they say. The supplier price is the price offered to employees of GM suppliers.

For example, a 2006 Buick LaCrosse has a sticker price of $23,595, says a Buick dealer who asked not to be named. The supplier price is $21,996, he says. Customers also can use any applicable incentives. GM offers a $1,500 rebate on the LaCrosse. Therefore, the vehicle would cost $20,596, the dealer said.

Value pricing?

GM's last big national incentive program, Employee Discount for Everyone, ended Sept. 30.

Mark LaNeve, GM's vice president of vehicle sales, service and marketing, had insisted that GM would stick to a value pricing strategy for 90 days and offer no big national incentive programs. But the automaker reported a 23 percent sales drop in October from the year-ago month, and dealers have been pleading for more incentives.

Dealers asked GM executives about value pricing during a closed-circuit broadcast on Friday, Nov. 11. Executives told them that there are two big selling seasons -- summer and year end. Dealers say GM executives told them GM would be "crazy not to have a promotion" during the year end because "all the competition will."

GM's value pricing strategy consists of lowering sticker prices on the base models of certain vehicles. The program is designed to move the stickers closer to the transaction prices.

Dealer profits

GM told dealers that it will start a national advertising campaign on Sunday, Nov.13, using the slogan, "See some red. Save some green."

GM will send red tags to dealers to hang in the vehicles' windows with the revived advertising phrase, "The price you see is the price you pay, not a penny more."

"It's not nearly as good as GM's employee pricing sale," says Ken Fichtner, owner of Fichtner Chevrolet in Laurel, Mont. "It's 2 percent higher for the customer than GM employee pricing was."

Fichtner says GM will give dealers $400 gross profit per vehicle under the promotion. He says the $400 will be less than the profit per vehicle he received with employee pricing, which was 5 percent of the sticker minus the destination charge.

But Buick dealer John Rogin says his sales staff broke into applause and cheers when GM said the salespeople's bonuses would be $150 for each vehicle sold in November and $100 for December.

GM ran a Red Tag sale at this time last year. Under it, dealers set a vehicle's price by combining previously announced incentives with a cash bonus between $500 and $2,000 when buyers financed through General Motors Acceptance Corp.

Many dealers were lukewarm about that program, and GM's December sales in 2004 fell 3.2 percent despite the program.

GM will end any other existing incentives on many of the 2005 vehicles with the new Red Tag Event.

It's official- GM is trying to bankrupt not only itself, but it's dealers as well. Anyone interested in a GM product better grab one this weekend- there's some huge rebate money that goes away Monday when the "sale" starts.

 

I smell the demise of GM coming soon.

 

Dang.

I guess the rendition I saw of the theoretical 07 Camaro I saw the other day will be a dream for sure.

I'll enjoy the 95, no doubt, in any case.

Oh, this will be even more expensive than the sham known as "employee pricing"? Well, that's something.

GMAC has to be doing well for more of this comedy to be going down.

 

Cool, cheaper cars for us GM fans. And despite what mistercmk says, I don't see the demise of GM. Last time I checked they were bigger and making more money than Ford. Go GM.

 

This doesn't look like a good idea to me...but since GM is a big company, we'll run with it

 

Just doesn't make sense to me.

 

RangerPilot- check again. GM lost $1.07 billion last quarter,and had to restate '01's earnings for a revision downwards of about $400 milion. That comes after a loss of $1.01 billion the previous quarter. Throw in about $9 billion in pension liabilities in the Delphi debacle, and it's starting to look ugly. This could all add up into real money pretty soon.

 

In a quarter they lost that much?!?!?!? Then why in the hell are they doing this?

 

three simple words FAR EAST COMPETITION those companys are killing our us companys.
And from some thing my fathers brother heard on big mo at the end of ww2. in the next war we have together you will never know what happened as a shot will never be heard.
well to me it's happened started with the name toyota.

 

The part I have a problem wrapping my head around is this: free trade, as a concept, is all fine and well. But the truth of the matter is that it's only practised in one country that I'm aware of- the US of A. The rest of the world has a rigidly structured, and protected home economy. In many cases, tariffs are designed to keep us out.

 

How can GM send a price tag out to a dealer and tell the dealer THAT is the price he will sell that car for? And to top it off, tell the salesman he will be paid $150 for each car he sells...
Isn't a dealership a private business? They have their own costs and profit margins to maintain. By GM dictating sales prices, profit per car, and even amount paid per salesman, isn't GM taking over the gross income stream for the dealership? Each dealer still has his own particular expenses, heat, elect, heating, rent, upkeep, salaries, and yet each dealer is only allowed to make $400 a copy? Man, I don't get it!!! What happened to private free enterprise?

I can tell you something is happening at Ford around here anyway. I spent a lot of Saturday with the salesmanager of my Ford dealership talking cars, going round and round, and finally completing the deal on a Left over '05 Crown Vic LX Sport, and he was busy working 2 other deals going on besides mine. He told me earlier that last month had been a total disaster, but this month looked to be picking up, and he was VERY busy Saturday! He sold two Vics in the past week, and mine made him with only one left.. Well, I guess business was picking up! At least while I was there buying my Vic..I bought it for a little less than I could have under the old employee program. So maybe this new ford incentive program recently announced is tripping the trigger for potential buyers(at least it worked on me) and the dealerships can look forward to a good Nov-Dec. I know the price of gasoline coming down below $2, and the price of diesel dropping $.65 to $.70 cents a gallon the past week or so hasn't hurt either. I just hope the corporate Ford people don't start leaning on the dealers, and telling them how to price their stuff and pay their people like it sounds GM is trying to do.

 

Well.... the way GM words it, it's optional to participate, but the dealership can't be selective. Either none or all. As far as dealers are concerned, I think GM wants them to share their pain.

Congrats on the new ride, BTW!

 

Well I think I have made my thoughts pretty clear on any "pricing scheme" previously.
Without heading into politics, but as someone who has previously shipped around 3000tonnes of beef to the US annually, I can categorically state that the US has pretty darn strict requirements, and tariffs imposed on importation (in fact, far more so than even the likes of Japan - although Japans quality requirements were much greater).
I haven't tried importing cars though (Australia currently has a 10% tariff on any vehicle not assembled here, and imported from countries which we don't have a free trade agreement with.)
(Australia has since has entered into a Free-trade agreement with the US, so things might be different now, but as our family doesn't have the cattle station any more I don't know.)

 

You are going to see more cooperation between Ford and GM in the coming months and years. Ford is going to share the new 6 speed transmission with GM. Also don't be suprised to see the new 3.5L in a GM too at some point. China, Japan, and Korea automakers have the big three scared. The only question is if they can step up to the plate and deliver quality cars at good prices WITHOUT incentives. Ford shot itself in the foot letting Honda and Toyota put out better cars, (read Accord and Camry). Ford spent too much time focused on SUVs and Trucks. (Sorry truck fans) They let the Taurus get stale and ugly (outdated) Now they have to play catch up with the new Fusion and it's not really a new car. It's a Mazda6 with new skin. Lets hope the American car buyer likes the Fusion. I do.

 

It is a wonderful ride, and my first tank of gas I got 21.1 mpg.

I do hope GM and Ford Don't lose sight of the important roll the dealers play in this whole scheme of things. If they ignore the dealer network, it will fall down much faster than the corps presently are, and may never be rebuilt to the strength it is now. Once the dealer network fails, then the product is doomed, unless they somehow market it thru e-bay or Walmart. Then who will do the service and warranty work?