Tigster

Everytime I turn on the tv they are showing an ad for employee pricing and that they keep extending it. It is getting rather old, when we looked at getting an Escelade the price was decent but they want to do the financing through GMAC and the interest rate was 7.9% not a deal in the long run if you ask me.

Fanman

Yeah, as long as stupid people still think they are getting deals, the Big 3 will keep on pushing this. Great marketing gimmick.

psbjames1970

Actually it will, when they introduce...




CEO Pricing... YES YOU TOO CAN NOW OWN A GM AND PAY THE SAME PRICE AS OUR CEO!!!

playdoh43

domestics are currently trying hard to move away from incentives and toward value pricing. they want the final price to be much closer to the msrp thus the price on most 06 domestic cars has gone down. This is a very tough transition to make IMO, because consumers have come to expect to get huge incentive over the years. the minute they end the employee discount plan, their sales will go down the toilet with consumers waiting and expect the next around of employee discount to take place when the 07 models are about to come out. with high gas prices and sales for large SUVs declining sharply, the future is not looking too bright for detroit's big 3. GM's bond is about to get down graded to junk status and their most profitable division is their finance/loan division instead of their automobile division. they also pay more money to retired/inactive employees than they pay their current active work force.

Pkskull77

Great points! Many people are actually losing money with this employee pricing, because it really ties the hands of the dealerships, from what I understand they actually get cut out of the transaction. If they are out of the transaction, the employee price is the bottom line, and there is no room for negotiations.

Ironically enough, I would imagine that employees are getting better discounts now that we are getting theirs. So at some point when sales are in the *******, I wouldn’t be surprised to see promotions purporting “the real employee pricing.”

DARKMAZ8

GM doesn't make their money from selling cars. They make it from selling financing/leasing.

playdoh43

I think the key for them to become more profitable lies with investing in R&D and designing better products as opposed to laying out huge incentives. These current sales spikes are temporary and cannot be sustained in the long run. The big 3's august sales has already fallen significantly compared to july desptite the employee discount programs. while the japanese big three all had record months

another side effect thats not immediately obvious to consumers is the impact of imployee pricing on the residual value of their cars as the resale value of domestics have experienced a sharp decline since June 2005.

Pkskull77

You are correct! Innovation is the key to sales. Most American companies have spent the last 20 years reacting to Japan, which means they are about 2 years behind the times. There was a great article about GM on this site a couple of months ago, talking about this very problem. Even better they made fun of the Aztec, which is always good for a laugh.

KYLiquid

good question, im sure they want to stop doing it as soon as they can, but I think the cat is out of the bad....no one will ever want to go back to paying full price again.

Jedi54

iTrader: (7)

I hope they stop doing this soon.

It's KILLING the car business. Why not just install a freakin' kiosk and do away with the sales people.

They're wasting good sales people and customers are getting LOUSY service. What's the incentive to make you feel comfortable during your test drive? To call you back to see how your buying experience was? There is NONE! Customers no longer care if they get treated like **** because all they're looking at is the number @ the bottom of the invoice.

Little do they know that they're still get hosed on the price.

gateCrasher

Not sure if you work in the car sales industry, but it sounds like you might be close to the subject. If that is so, then I'm sorry if this offends you.

I could care less about dealing with a car salesman and I would rather purchase a car online or from a kiosk. In my experience, there is no value in dealing with a sales person and playing their little "how much do you want your monthly notes to be" games. Customer service is already a joke for the most part, so as consumers, we would'nt be giving too much of that up anyway.

Matter of fact, I would prefer to do my own research on everything I buy and not be pressured and lied to by a salesperson just trying to get another notch on their sell belt.

I hate to see anyone get put out of a job and be able to provide for their loved ones, but come on, these dealerships and sales people have earned a reputation and they will not get a lot of sympathy from the consumers.

-/gC

MTLbroker

Employee pricing is just a new twist to rebates. The car buying public is hooked on incentives. As someone has already posted, manufacturers don't make money on the cars themselves, rather on the financing.

Unfortunately, it is killing the industry. When selling cars at or below cost, there is no impetus to create better, more innovative products. The product becomes commoditized and as such, the only way to get people to buy is buy cutting margins.

The ugly side of employee pricing, or $3,500 cashback, or 0% financing, etc.... is that it has a detrimental effect on resale values. It burns the buyers who may not have received rebates and ultimately will turn off the consumer off your product.