GM Plans Pontiac Fire Sale
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From: Roseville, MI, USA
GM Plans Pontiac Fire Sale
This will go down as one of the worst ever decisions in GM's history....EVER.
GM Plans Pontiac Fire Sale
Tuesday, December 29, 2009
Print ShareThisGeneral Motors Co. is offering its dealers hefty incentives to move thousands of leftover vehicles from its discontinued Saturn and Pontiac brands. The unusual tactic could inflate the car maker's December sales and cut the cost to car buyers by as much as 46% off the sticker price.
In what is equivalent to a year-end fire sale, GM sent letters to dealers Dec. 23 saying it would pay them $7,000 for every new Saturn or Pontiac on their lot that is moved to rental-vehicle or service-vehicle fleets operated by the dealers. Dealers can then sell the vehicles at a more attractive price, though they must be described to customers as used because the dealers technically will be the vehicles' first owner.
The offer expires Jan. 4, the last day of the December car-sales month. GM will book the sales to dealers as fleet deliveries.
GM's move could speed the company's restructuring. Pontiac and Saturn, along with Hummer and Saab, were deleted from GM's lineup under its government-backed bankruptcy reorganization this summer. GM's remaining U.S. brands are Chevrolet, Buick, Cadillac and GMC.
The expense of the new program will add to GM's considerable cost of closing Saturn and Pontiac, a figure GM hasn't disclosed. GM spokesman Tom Henderson declined to comment on the financial impact of the new dealer incentives.
At the beginning of December GM dealers had 14,500 new Pontiacs and Saturns on their lots, which typically represents about two to three months of inventory depending on the model, according to Ward's Auto Reports.
Edmunds, another car-data service, estimates that GM will sell about 6,800 Pontiacs and 3,500 Saturns in December. That means dealers could have some 4,200 of the cars left.
Tuesday, December 29, 2009
Print ShareThisGeneral Motors Co. is offering its dealers hefty incentives to move thousands of leftover vehicles from its discontinued Saturn and Pontiac brands. The unusual tactic could inflate the car maker's December sales and cut the cost to car buyers by as much as 46% off the sticker price.
In what is equivalent to a year-end fire sale, GM sent letters to dealers Dec. 23 saying it would pay them $7,000 for every new Saturn or Pontiac on their lot that is moved to rental-vehicle or service-vehicle fleets operated by the dealers. Dealers can then sell the vehicles at a more attractive price, though they must be described to customers as used because the dealers technically will be the vehicles' first owner.
The offer expires Jan. 4, the last day of the December car-sales month. GM will book the sales to dealers as fleet deliveries.
GM's move could speed the company's restructuring. Pontiac and Saturn, along with Hummer and Saab, were deleted from GM's lineup under its government-backed bankruptcy reorganization this summer. GM's remaining U.S. brands are Chevrolet, Buick, Cadillac and GMC.
The expense of the new program will add to GM's considerable cost of closing Saturn and Pontiac, a figure GM hasn't disclosed. GM spokesman Tom Henderson declined to comment on the financial impact of the new dealer incentives.
At the beginning of December GM dealers had 14,500 new Pontiacs and Saturns on their lots, which typically represents about two to three months of inventory depending on the model, according to Ward's Auto Reports.
Edmunds, another car-data service, estimates that GM will sell about 6,800 Pontiacs and 3,500 Saturns in December. That means dealers could have some 4,200 of the cars left.
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So, what would you have them do? Sit on the remaining stock for these dead brands so long that the actual Saturn and Pontiac dealers close, and they have to be shipped off to Chevy dealers to try to sell or something?
It's pretty obvious that it's going to take BIG, MAJOR incentives to get someone (or some company for that matter) to plop down their hard earned money on something that is going to depriciate like it was a wrecked car because the brands are dead... especially when there are basically endless comparable alternatives from not only other surviving GM brands, but also from every other manufacturer out there.
It's not like they were offering this from the minute they announced the brands were dead either.
Just like any other "going out of business sale", you start with relatively low discounts to clear out your inventory. The more popular stuff will sell with lesser discounts. As that stuff sells off, you increase the discounts, because what is left is the less desirable stuff, and it takes more of a discount to move them.
This is pretty much "Going out of Business 101" stuff right here........ the very basics of this kind of thing. It's pretty simple and straight forward.
It's pretty obvious that it's going to take BIG, MAJOR incentives to get someone (or some company for that matter) to plop down their hard earned money on something that is going to depriciate like it was a wrecked car because the brands are dead... especially when there are basically endless comparable alternatives from not only other surviving GM brands, but also from every other manufacturer out there.
It's not like they were offering this from the minute they announced the brands were dead either.
Just like any other "going out of business sale", you start with relatively low discounts to clear out your inventory. The more popular stuff will sell with lesser discounts. As that stuff sells off, you increase the discounts, because what is left is the less desirable stuff, and it takes more of a discount to move them.
This is pretty much "Going out of Business 101" stuff right here........ the very basics of this kind of thing. It's pretty simple and straight forward.
Last edited by Darth Xed; Dec 29, 2009 at 08:12 AM.
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From: Jersey Shore
BAH!! I knew I should have sat tight for a while.
While they will be "used" the price of these cars would be huge!
How many Solstice hard top GXP's are left? Imagine picking one of them up for 20k. Damn it!!!!!!!!!!
While they will be "used" the price of these cars would be huge!
How many Solstice hard top GXP's are left? Imagine picking one of them up for 20k. Damn it!!!!!!!!!!
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Joined: Jan 2000
Posts: 10,285
From: Albany, NY
If Motors Liquidation Company is doing it then how is it one of GM's worst ever decisions?
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Joined: Mar 2000
Posts: 162
From: St. Louis, MO
How does old GM who has no money pay for something?
Also how are the allowed to give priority to this over all the other debts they have like stock owners, class action lawsuit I will never see a dime of, etc, etc...
Isn't there like a legal precidet for who gets paid first?
Also how are the allowed to give priority to this over all the other debts they have like stock owners, class action lawsuit I will never see a dime of, etc, etc...
Isn't there like a legal precidet for who gets paid first?
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Joined: Jan 2000
Posts: 10,285
From: Albany, NY
How does old GM who has no money pay for something?
Also how are the allowed to give priority to this over all the other debts they have like stock owners, class action lawsuit I will never see a dime of, etc, etc...
Isn't there like a legal precidet for who gets paid first?
Also how are the allowed to give priority to this over all the other debts they have like stock owners, class action lawsuit I will never see a dime of, etc, etc...
Isn't there like a legal precidet for who gets paid first?
Would you rather have have $100 or be 1/100ths owner of a Vibe with 99 other people you don't know? Don't forget, cars are depreciating assets.
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Joined: Apr 2001
Posts: 3,698
From: USA
Think of it like when Circuit City went out of business, was bankrupt, and sold stuff at a loss to move it so creditors could get whatever they could. Liquidation Motors is a company with assets and cash to fund it's wind down operations. Their goal is to sell all the cars left on lots, and whatever fixed assets Pontiac and Saturn have to recoupe money that will eventually be ioven back to the bond holders who last their *** in GM's bankruptcy. Most Dealers have floorplan financing and don't actually own the cars on their lot. Basically what Liquidation Motors is saying is..they are reducing the price of the car by $7,000 as closeout but the car is now sold and titled to the dealer, is their asset, and has to be paid for in full. Then Liquidation can get the asset off the books and make cash for bond holders. A viable dealer will not be hurt by this as they can likely just change the way the cars are financed to whatever they use to pay for their used car floorplan.
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Joined: Jan 1999
Posts: 1,547
From: Panhandle of West Virginia
I wonder how many dealers will atually give the full discount. I don't see anything in that article that says that the dealer will actually give 7K off the price, only that they can if they want to. If I could find that deal on say a new G6 I would be all over it.
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Joined: May 2000
Posts: 4,738
From: Charleston, SC
Anywhere to look at pricing? or discounts availible? Also since they are technically "pre-owned" do Hybrid government rebates not apply?
Last edited by MustangEater82; Dec 30, 2009 at 06:10 AM.
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Joined: May 2000
Posts: 4,738
From: Charleston, SC
damn too bad its looking like the inventory is pretty sparce around here.
Bunch of Sky redlines for $26-28k
http://www.saturnorlandonorth.com/Ve...lts?search=new
Bunch of Sky redlines for $26-28k
http://www.saturnorlandonorth.com/Ve...lts?search=new