Okay here is something I have noticed...with GM's rebates prices for thier olders cars have steadily crept up.

For instance a Cavalier costs $14,595 in it's most base form now, which seems strikingly high...yet add the $4,000 rebate to it and the price becomes a steal. Same with the Malibu, S-10, ect.

Now that GM's new cars like the Grand Prix are in showrooms we are seeing GM holding the line on MSRP's. The new Grand Prix and Malibu have pretty much identical MSRP's to the car they replace.....which on the surface seems awesome...

Yet they don't offer near the rebates of teh cars they replace. The ION and Vibe have yet to break $3,000 in rebates, which makes me wonder if they will....

The GP is still too new to tell, but me thinks it will be a while befor you see a $3,000 rebate on there....


So in short GM has raised MSRP's to very high levels on it's current crappy old cars, but offset it with rebates that make the cars dirt cheap...

However now that the new cars are coming they are pricing them the same as the cars they replace, yet making them look like great values...yet by not offering similar rebate sthey cost the buyer more....

I wonder if this is GM's long term strategy?

 

perhaps..... now that we're used to initially looking at those prices...



I remember reading a news article on how this girl got an awesome deal on a new Ford Ranger, $8000 off from its MSRP of $28,000 down to $20,000.. She was estatic..... but wait.. how does a Ford Ranger hit the $28k mark?!

 

So . . .

GM's pricing strategy is to capitalize on all the stupid people in the world?

Hmm. Might work!

 

They've been doing this for a while haven't they? I mean, it's easier to adjust the rebate to the market rather than change MSRP. If they wanted to, they could change the rebate daily, the MSRP they couldn't. If you think about it, it's a pretty smart thing, or maybe I fit in with all those stupid people!

 

I don't know about GM, but I do remember reading an article about Ford the other day and it showed how you may think the 2500 dollar rebate on certain Ford cars is great until you realize that they increased the sticker price by 1800 bucks at the same time. In other words it's really no different than slapping a monster sticker price on a shirt, then putting it on a 50% off sale and watching the people flock to it.

Same basic concept as GM selling the Escalade, especially in its first generation format when it was so closely related to the Tahoe/Denali that it was laughable, yet people still paid the 10 grand extra for it.

Personally I think the new Grand Prix and Malibu will have rebates and invoice pricing soon enough. Pretty much any new manufacturer tends to give the best deals on its older designs and have the most markup on the newest designs. The same thing happens with clothing fashions, and many other things. Marketing is marketing no matter what industry you're talking about.

 

This is mostly true, to a point. It's not just the "crappy" cars getting these price increases. It is all the GM products. You can't believe how many we have in a year's time. It's strange though, you'll have two identical cars on the lot, one $200 more than the other because it is a newer model and has the new price. Can be tricky sometimes. But people eat this strategy up. Raise the prices on all the cars, then put on the rebates and make the same. Good idea to me. Way to go GM. Do what it takes.

 

Yep, reminds me of going to Sears, where there's always a sale.

If GM thinks that they can play a ratcheting price game as new models come out, I highly suspect they'll be on the receiving end of a severe showroom beating. With the profit margins that Toyota and Honda run, they can more than afford to drop their prices a bit, which would severely crap GM's pricing power. This would not be a pretty fight and probably wouldn't do much good for either side.

 

How do you find out a manufacturers profit margin on each car they sell?

 

In the new issue of Car and Driver, they review the Cadillac SRX and call it "pricey . . . before the inevitable rebates."

Yes. In print.

 

Toyota and Honda almost operate in their own little pricing universe independent of the other automakers. Both companies are constrained more by short supply than they are by demand, so they simply price their products at a level to sell out their factories. Since they can't produce any more cars (right now, at least), there would be no incentive for them to reduce their prices. Thus GM is mostly safe from any Toyota or Honda instigated price war.