I think he's on to something.I know of 2 people who have bought GM in the past month that have been import drivers their entire lives.

The first is a story i related either in this thread or another where a guy thought the vette was in the program and ended up buying the car anyway once he saw and drove it. Without the sale he'd still be in his Evo. Anotehr guy has driven european cars exclusively. Decided to pick up one of the Saab/WRX things because the deal was so sweet. He'd still be in his Audi if not for the sale. There's also a brand new malibu in my lot, not sure the story though. Out of a relatively small semiconductor / technology shop of almost 100 people with a lot dominated by boring imports and eurotrash, that's pretty significant IMO. I've also seen a G6 and some of the other new cars in the past year. These people are deciding to buy GM with no peer pressure at all, just getting drawn in.

I've also heard a couple other people getting the new car bug who have specifically mentioned this employee price sale. Hell, i was talking with another guy in my hallway after reading the blue devil vette article and about the idea of a factory supercar. I explained to him that while they're awesome, even if i had teh disposable income, i'd be more likely to buy a convertible and do it my way. Related it to buying an 04 GTO on purpose even though i knew i was spotting an 05 50hp and better brakes because of the 7k i saved. He immediately shot back that if i waited for the employee price sale then it wouldn't have been nearly as bad.

Point being. The GM employee sale is getting talked about and on people's minds. Combined with a well orchestrated and advertised reduction of MSRP across the board, this is looking huge. Even if some of it is pull ahead sales, money now is better than money later. And also, the more of these great new cars are on the road, the more people will see and think about them. They sell themselves if people don't think they cost too much and don't even bother looking at them.

 

Well we have ourselves a geniune disagreement. The difference between my scenario and GMS is mine makes profit, GMS does not. If the enterprise isn't profitable, it cannot exist. Hence GM's junk bond rating, massive debt, and constant resrructurings and downsizings. You can't keep losing money and survive.

 

I guess the question is, are they REALLY losing money? And how much?

If they are losing a little, but leading into the MSRP reduction and getting people interested in the brands again then in the long run they win. Just getting press like GM market share increasing is INCREDIBLE press. People are sheep. If 'everybody' is buying GM cars, so will they. But for 10 years, eveyrthing they read said everyone was buying japanese. Maybe michigan isn't the right place in teh country to feel the pulse of an average car buyer and the peer pressure they follow.

But compared to the other rebates that normally get kicked around anyway, is this really that huge anyway. If it's just a matter of trimming the fat, in the name of great press and free advertising in the form of cars on the road, then that's just a cost of doing business.

 

GM makes their money when the dealer is invoiced. Having to incentivize the sale comes directly out of the profit column. The real question is the degree to which dealers order replacement vehicles. If the dealers don't feel aggressive and hesitate to bulk up, GM is in HUGE trouble. Reducing the dealer margin on 06's will not inspire the retail operators. The ones I know plan to make their living in the used car departments and say the hell with GM and their goofy programs and constant interference.

 

Yes, I really feel bad for car salesmen. Constant interference? Please. As a customer, I can certainly tell you that there was not nearly enough interference from GM when I first went to see the 2004 GTO and it was "market adjusted" to $45,000.
Your in your own world Buickman.

Edit: Just found an interesting article in USA Today. Here's the link:

http://www.usatoday.com/money/autos/...les-usat_x.htm
Here's an interesting quote -
Hmm... It seems as if the dealers aren't being shafted as much as the Buickman likes to tell us.

 

What do you suppose the average profit was before GMS? $1500 may sound large but it's not. Take out commissions, other delivery expense, and other overhead, and you're left with chicken feed. Sell a $15000 car and after expenses, make nothing. Whoopie!

 

I agree, When I sell something to people, say a bag of dog food cause thats usually what it is in my feild... Pedigree for example, "I can get that at Wal-mart for 15$" when my price is 19.99 I say thats a good price you should go there.

or when someone tries to sell me something that someone down the street will buy for 10 bucks i am only willing to pay 5... i tell them to go down the street...

Its kind of like the guy who is trying to sell the elephant... Comon 1 elephant for $3,000 its a great price!... "I dont need an elephant" Comon... $2,500, "I dont need an elephant" fine find, 1,500 for an elephant thats such a good deal. "I honnestly have no use for an elephant." 2 elephants for 1,500 I really need to get rid of these guys... "I'll TAKE EM!"

^^^ funny story but who the heck needs an elephant? accually i donno what the elephant has to do with cars...

 

So you are saying that Commissions and overhead on every car is about $1500. I would say that your overhead is to much.

People get paid and the bills get paid. I can tell you that Buick will probably have higher profit margins for all involved than say Chevrolet, so I don't belive the $1500 overhead unless something is really wrong at the dealer.

 

Didn't mean to imply overhead was that high. The point is when overhead is deducted, not much is left. When the dealer has a hot product, he deserves the oppportunity to reap the profit the market will bear. I know some dealers who are requiring "bumps" on the interest rates on certain products due to the "forced" pricing.

 

So what you are saying is that you ARE making money but you feel like it isn't enough. Is that right?

BTW lots of other products in other industries ARE price controlled, specifically lots of high end electronics, Sony XBR products for example.

 

Which is the next slimy practice car dealers use.... kickbacks on financing.

BTW, next time you buy a new car kids, and you're not getting 0% or some other special rate from GMAC, go straight to a credit union and get financed there (you ARE ALREADY a member of a credit union for this very reason, RIGHT????). DO NOT allow a dealer to arrange financing for you unless he can beat the best rate you can find.

So... the next step GM needs to undertake is to have a special financing rate associated with the employee pricing through GMAC by which GM can remove that little trick from the dealer's bag.

 

High end musical instrument and equipment manufacturers control their prices also. Furthermore, they have very stringent standards for inventory and advertising.

Basically, you can tell if a musical instrument dealer is a class operation by one simple test:

Does the dealer carry Fender?

If so, they're going to be a good outfit. Fender puts up with ZERO bu!!**** from dealers where their product is concerned.

 

My prediction is that this fixed pricing will never hold. Dealers will revolt enmasse. As to the GMAC spinoff, no news to report as yet. That's one bet I'll be very glad to lose.
What many fail to realize is the drop in late model used values. When GMAC takes back the leased vehicles already on the books, the loss will be tremendous, vastly outwaying any short term crowing about temporary market share. Of course, the short term thinkers at the Ren Cen don't say much about weakened portfolios.

 

GM needs fewer dealers anyway.

The ones making money would be fools to revolt, and voluntary disenfranchisement is the best kind of disenfranchisement there is.

 

Pacer I dont know where you live, but I live in the shiny Los Angeles.. and quite frankly there isn't enough GM representation around here.
There are 2 dealerships I know of within probably 10-20 mile radius... and thats not enough considering there are twice that for everyone else.