I'm sorry, Martin, but despite your sound arguments that this promotion made sense from the GM perspective of 'let's get these huge hulking cars off the lots any way we can by appealing to the avarice of people who would probably buy them anyway,' I remain in hate with the idea.

Two reasons: 1- although the basic principle of offering rebates or other incentives on cars, which seems to disturb a poster or two here, is a very simple marketing tool that I do not object to, (ie: half of all products at the grocery store are on 'sale' every week- so what?) it can be misused. In this case, I think it has been. It's one thing to offer a discount for financing through the dealer or for buying when sales are slow- it's something else entirely to pay people based on how much of a precious natural resource they use up without rhyme or reason. That's just wrong. Bad and wrong.

2- GM does not quite seem to get that the American car companies are in a battle to save their own skins here because they have been so backwards-thinking lately. They need to adjust that thinking and come up with LONG term solutions, which, as you say, this definitely is not. If they really want to compete with foreign car companies, win consumers back and meet the needs of the public, they need to understand the direction the country is going, car-wise

Trying to find ways to sell more people Hummers they don't need is NOT the answer. Yes, sales are a matter of want more than a matter of need, but convincing people who sort of want something that they really want it is a question of marketing, and that choice is up to the company- what are they going to use their promotions and discounts to make people want? Why, on God's green earth, make them want Hummers? And not just want to have them, but to drive them AS MUCH AS POSSIBLE? As a status symbol and for trips to the neighbor's barbecue to show off, okay, but for road trips? Oh, the humanity!

 

What's the big deal?

Does it seem like GM is paying attention to SUVs at the expense of Pontiac, Buick, Saab? It makes you wonder if they have any interest in making cars. There are probably many others with that perception....

 

I'm not certain which boat is being missed. What we have here is a promotion that is targeted at moving very specific vehicles in two states. So GM winds up paying back customer $60 - 250 per month for certain vehicles in certain states as opposed to $2,000 - 2,500 per vehicle across the board all over the country. At the same time it gets the customers familiar with a new product (OnStar Vehicle Diagnostics) and maintains what is already a strongly growing INCREASE in sales of the company's most profitable vehicles. How is this a going out of business strategy? And if it is a short term strategy, but happens to be one that works, the problem with that is????



I would agree if this were the first time that GM had offered rebates or if it were done as sales of the vehicles in the promotion were dismal or if GM were the only automaker offering some sort of sales promotion. But, fact is sales of the re-designed Tahoe and Yukon are exceeding sales of the models they replaced with no incentives at all. Sales of the re-styled Impala are also exceeding those of the model it replaced. The Hummer H3 is going gang-busters all over the country. Fact is DCX and Ford are offering much larger incentives to move a much broader segment of their portfolios, all across the country, not just in two states, and Toyota is deeply discounting their large trucks and utilities. At this time last year, GM utilities were discounted $5 - 7,000 each. The new models are not discounted at all, until this promotion, and are flying off the lots all over the country. Giving back a couple hundred bucks a month on a vehicle that nets four or five digits profit is not really a bad thing, especially if sales increase dramatically as a result.

Your perception is a reasonable one, depending on how much info is available to you as you are forming it. In most peoples' minds, rebate, cash-back, incentives, and other such promotions signal "what am I gonna do about this product I can't sell? But given that we are dealing with vehicles that on a nationwide basis are selling very well it doesn't fit that model. Fact is, the reason this is a laser focused promotion in two states on a limited number of vehicles is that these states are important in a longer visioned (not shorted sited) view of total market penetration.

Peace,

Martin

 

Because GM makes a boatload of money on each one they sell?

 

PS you wouldn't believe how long it took me to come up with boatload.

***load came to my mind first, followed closely by ****load and ****load.

 

No problem with that. That's why I point out that very few people on this board would have any interest in these vehicles with or without the promotion. On the other hand, sales of most of these vehicles is increasing WITHOUT the promotion. This promotion is laser focused at people who want and would buy an SUV but are concerned about fuel prices. It says one thing...buy the vehicle you were going to buy, we'll help you level out the fuel cost.

Some of the vehicles they are jumping right back into have only marginally better fuel economy than the Tahoe. The promotion also applies to Monte Carlo, Impala, LaCrosse and Grand Prix, all of which get 30 mpg highway and the Buick Lucerne which gets 29. Some of the vehicles in this promotion (Tahoe, Yukon, Impala, Monte Carlo) have Advanced Fuel Management technology that shuts of fuel to half the cylinders when full power is not required. This allows a V8 Impala to achieve 28 mpg on the highway, compared to 29 for a V6 Honda Accord compared to 30 for a V6 Impala. Some of the vehicles in the promotion (Tahoe, Yukon, Monte Carlo, Impala) offer models that run on FlexFuel which is better for the environment than E10. I do recognize that E85 is not readily available, but there is incredible pressure from the auto industry and Washington to push the oil companies to remedy that situation and they are reacting. Will it have great impact over the duration of this promotion? Most likely not. Will it have impact over the ownership life of vehicles bought under this promotion? Probably.

It may not have been what YOU would have done, but it was still a very good move for the population it was intended to impact.

Peace,

Martin

 

Keep in mind that this is only one market promotion on a select few vehicles in two states. It does not mean that there are not other marketing activities targeting other vehicles in other segments of the market in other states. There is a lot being done in the world of cars.

• Impala & Monte Carlo get Advanced Fuel Management on V8s and soon on V6 models<
• Saturn Aura is about to launch with a fuel efficient V6<
• Buick Lucerne is selling very well, in part due to its 29 mpg hwy mileage that is equivalent to the smaller lighter Honda Accord<
• Pontiac Grand Prix hits 30 mpg hwy with a V6<

All of the above, except the Saturn Aura are included in this same promotion.

We've also launched the Pontiac Solstice and Saturn Sky into the car market. There's more coming, but as usual, I can't talk about them yet.

Peace,

Martin

 

GM makes money on H2, but less per vehicle than what is made on many other vehicles. GM also sells a lot less H2s than most of the vehicles that are more profitable than the H2. The revenue generated by H2 is not gonna save the company. So why continue making it? Because it provides a halo for the brand. People come into the showroom to see the H2. They may leave with an H3. H3 outsells H2 by easily 3:1. That's a gross over-simplification, but the logic still tracks.

Peace,

Martin

 

True. Frustrating, but OK. I'll but that. Certainly consistent with GM targeting what it knows are its core strengths.

It is always illuminating to get the picture as seen from the other side of the corporate table. Everyone acts rationally within their own context. Thanks for your input, despite the mountain of skepticism we relentlessly throw up!

 

butt load
**** load
crap load
*** load

Take out the spaces and they all work.