Now it's 'Employee Pricing'!

they need to sell cars, fast or they will all be in trouble.

 

Next, well They will offer prolly stuff like I-pod shuffles if you buy a car.

 

Didn't GM say their sales went up 40-some percent with the employee discount? I'd say they're all jumping on the bandwagon, just like they all jumped on the butt-ugly-car-design bandwagon.

 

Wasnt there a car a few years ago that when you bought one it came with an IPOD? Like a Volkswagon beatle or something?

 

In canada, if you buy a Ford they give you a free dell computer. Desktop or laptop.

 

They already are in trouble!

 

Coming to a BFE Missouri dealer soon!

 

Like Chis Taylor said, GM announced a 40% increase in sales in one month. That is a huge in most industries, but in the automotive world, unheard of. Hence, the bandwagon was pulled out and everyone hopped on.

Do not expect the following Employee discounts.

Lamborghini
Aston Martin
Bentley
Lotus
Spyker
Saleen S7
Rolls Royce

and most likely, Ferrari as well.

 

I have to say it does seem to make a difference. Of course all of it is percieved because they are taking the large dollar amounts off of an inflated MSRP anyway. When was the last time any of you payed MSRP for a daily driver. BUT...the perception to a lot of people (read sheep) is that they can save lots of money if they go buy a new car right now.

I saw an actual sticker on a Ford that claimed savings of about $7K on a $30+k car. I saw an ad for a Cadillac that advertised over $10K off sticker price. It's all about perception.

Personally I'd rather buy one a year or two old and save about $28K off new sticker of $48K!!

 

As Wayne said, the whole thing was to help the dealers reduce their inventory and it worked. Most dealers had about 120 days worth of inventory, which is double of what they want. The floor plan on those extra cars was eating them up. Most GM dealers are now well under 60 days.
Also, if you were a smart shopper before, the discount was not much more than you could always get by offering invoice on their cars. This marketing/promotion simply took in the uneducated car buyer. They got a good deal because they would have been the ones that would be happy to get $1000 off the MSRP and leave another $1500 on the table.

 

Gee, that inventory wouldn't be full of a whole bunch of gas-guzzling SUVs, would it?

RMX

 

I cannot recall the last time i paid MSRP on any motor vehicle car, truck, motorcycle, jet ski.

The one thing that employee pricing will do is better educate the public on what a dealer does make by selling a car at MSRP everyone thinks that a dealer is making 50% profit off of the sale of the vehicle. In reality it is the "Dealer Prep", "Documentation Fees", "Extended Warranty", Delaer add ons" that the dealer ship makes the big bucks from a sale.

For example the true employee pricing program does not allow for the dealer to charge prep, doc fees, or sell extended waranties over the cost of it. So the dealers still makes bank on the deals.

 

Very true...and you also will not get any sort of "employee discounts" (or just about any other rebate) on either the C6 Corvettes or the H3 Hummers....ask me how I know...

Did get the "discount" recently on the wife's '05 Tahoe -- but it appeared to me that the dealer simply inflated the asking price and then "discounted" it back down to what they were asking nearly to begin with...go figure.

 

Mantra of US car manufacturers:

"We lose money on every transaction....but we make it up in volume."

Explain to me why the US car companies are still in business? How long can you continue to make cr*ppy products, and lose money every quarter...

It won't be long before a government bailout is required...

 

the thing that gets me is how long will this last? and more importantly, where the hell do they go from here?

Now that the general population knows exactly how much dealers are/would make off a sale...they'll never be able to sell a car near MSRP EVER AGAIN.

Also, with the german and jap cars swinging bigger warranties....the 3 year/36,000 mile BS ain't gonna cut it. So there goes more profits lost due to repair work.

 

I can see it now:

Buy one get one free!

No payments for 5 years!

10,000$ for your trade-in, irregardless of condition!


The sad fact is that these cars are being GIVEN away. When your product is so undesireable that you sell everyone at a loss...gee, tells you something, doesn't it?

Somehow honda/toyota are doing fine...just TRY to get 3000$ off MSRP. They will laugh you out of the showroom.

Porsche has made poor quality cars lately (Cayennes are falling apart, early 99-01 911 had lousy interiors), yet they are among the most profitable in the industry...

The auto industry has tons of problems...

1) Unions. Ah, yeah. The guys screwing on the tires deserves 48$/hour. Ok.
2) Retirement benefits...for LIFE. Must be nice...20 years and youre done.
3) Health benefits...for life. Gee, even after you hit medicare age we will still pay for your benefits...ok?
4) Lousy products, outdated, poor residual, don't last very long... It will take DECADES to turn this perception/reality around.

Oh my god, HYUNDAI has a better reputation than many US cars!!! Think about it, it was a laughing stock 10 years ago!!! Sad...

 

The population that buys American cars is VERY price-sensitive...this is the perfect promo to suck those buyers in.

The poplulation that buys american cars also has a very short memory...so I wouldn't worry about long term effects with them demanding these new lower prices.

I do worry about the long term effect of the horrible cars being put out by American companies. As a long term GM fan, I'm embarrased to say that the only GM vehcile I would consider buying would be a truck, a Corvette, or one of the Cadillacs (despite the fact they are all hideously ugly). I _want_ to like the GTO, but just can't.

Ford isn't doing much better; the Focus was a great example of how good a small car could be, but even now they are changing it (for the worse). The new Mustang is EXTREMELY improved over previous generations...almost but not quite to the point I'd consider buying one.

DChrysler is making some better looking cars, but nothing that I'm burning to own...

Until the American companies can come up with an Accord or Camry beater (even at a slightly higher price point) it's just not going to happen.

Bill

 

Great post.

I cannot understand why the US companies cannot come close to matching the interior quality of imports. My 3-series is nice inside. The dash is some sort of slightly rubbery and slightly soft and non-reflective plastic product. The switches have a nice "click" to them and I can feel the intelligent design in the car. Auto-up and down on every window switch... car automatically reduces from full-on wipers to intermittent when I come to a stop... the car has held up nicely over the 3 years and 30k miles I've had it. It doesnt rattle or squeak and it still feels solid and positive.

Compare that to US cars. The buttons and switches are the cheapest of the cheap. They cover them with these big "globby" shiny plastic covers to give them some sort of flowing look, but really they just cheapen it. The cars rattle and squeak after 20k miles. They just feel disposable.

I don't get why GM doesn't go buy a 3-series, spend money and do an analysis of the material used on the dash, and just copy it. Take the car apart and see how it's fastened together because it doesn't rattle or squeak. Copy that too. Add whatever sound deadening materials are there to equal the solid feel and no rattling features of the BMW. Give it a nice positive feel and connection to the road. Don't throw on a ton of wings and scoops and flares and big rounded body panels with tons of air space inside them, package the car intelligently. Tuck the wheels into the fenderwells a bit like BMW does.

And then sell it for a reasonable price - maybe $28-33k or $38k loaded up. It will sell well and it will compete favorably with imports and it will help change their reputation.

It seems the US car companies are resting on laurels and don't get too many repeat buyers (it seems)

 

I just bought a Pick up for work and it was 24k list and I paid 17k with no fight or not much of a fight. I am pleased with the price. Hell I needed a truck.

 

In terms of interior quality BMW wins hands down. I actually prefer their materials to lexus. Very high quality, car feels like it will last 200,000+ miles. After 2 years there is zero wear anywhere in the car...

I think the US manufacturers are using the lousiest quality products because thats all that they can afford. Their overhead is HUGE compared to other manufacturers...

And they can't really afford to go upscale. Who the hell would pay 30k$ plus for an american car??? Don'y we remember the recent thunderbird fiasco? The G6 also has the same problem: for 35,000$ I can get a BMW or entry level Mercedes. Which would you rather have???

Corvette is also threading in dangerous territory. 60-70,000$ for a new vette!? Are you nuts? You can get a 997 for that!!! The vette was a good valu at 50% of the 996 price...not for 85%...

 

Yeah, I had an '02 3-series coupe, and for a relatively common car, in a conservative steel grey metallic, it got compliments everywhere. Real elegant interior, drove extremely nicely.

Recently I had to get my Jeep fixed (some moron ran into it in stop-and-go freeway traffic) and my rental car was an '04 Chevy Monte Carlo. I was just astounded at how cheap-feeling and ugly this car was, in and out. The trunk never closed on first shove, there were rattles and squeaks everywhere, the doors each weighed 800 pounds and were impossible to control when opening/closing.

I'd bet almost all Monte Carlo's go to rental car companies. I was embarrassed driving it, because I noticed how few of them are out there. I'm sure GM would say "we have more modern, refined cars." But the point is Chevy dealers are still selling THESE.

I also had a rental Buick LeSabre last week up in San Francisco. Metallic grey lump, plastic wood contoured around the dash, skinny steering wheel with no leather to grip, and the same mouse fur seats as the Monte Carlo. This was an '05 model. I know Buick does well in quality surveys, but honestly I'd rather take my chances with a VW or step up to a BMW if I needed a comfy but stylish 4 seater.

Would I pay $32K+ for a new BMW 3 over anything GM makes? You bet.