GM plans to launch a "red-tag sale" on Sunday that will allow anyone in the United States to buy vehicles at the same price employees of GM's auto parts suppliers pay, GM dealers told Reuters.
The new discounts come at a time when the world's largest automaker grapples with high health care and commodities costs, stalled sales of big sport-utility vehicles -- its longtime cash cows that have now lost popularity due to high gasoline prices -- and the loss of U.S. market share to foreign rivals.
GM's U.S. October sales slipped 23 percent in the absence of any new incentives following a highly-publicized summer employee discount program, which pulled many potential car buyers into the market earlier than they might have been otherwise.
The new discounts, which will last through Jan. 3, will be available on all 2005 and 2006 Chevrolet, Pontiac, Buick and GMC models except the Chevrolet Corvette, Buick Lucerne and the Pontiac Solstice, dealers said.
A GM spokeswoman declined comment.
Dealers said the new program offers bigger savings than the employee discount program because it includes larger overall discounts.
GM has lost nearly $4 billion so far this year and its shares have lost almost 40 percent of their value in the same period.
GM shares plummeted to a 23-year low on Thursday amid concerns over a strike at its main auto parts supplier, bankrupt Delphi Corp. (DPHIQ.PK: Quote, Profile, Research) , which could shut down some plants and force GM to burn through billions of dollars in a matter of weeks, analysts said.
But shares recovered slightly on Friday, as the United Auto Workers union ratified a deal that would slash the automaker's long term health care liability by $15 billion and reduce health care expenses by about $3 billion annually, before taxes.
The shares closed at $24.48, up 97 cents or 4.1 percent, in Friday trading on the New York Stock Exchange. (Additional reporting by Tom Brown)
GM's (who is hemorrhaging money) motive in the discount is to move slow selling models; can sell all the Vettes and Solstices they can make at or close to MSRP, so why should they discount them?
Here's an idea, how about building cars that people would want to buy for their value rather than the discount. The corvette and the solstice are an example of cars that people want to buy. How about applying some good thinking to what people want in family cars?
I agree... my winter car is a Grand Prix.
..but most people don't have a crave for exaggerated plastic.
GM really needs to take a good luck at what the foreign cars offer.... especially in thier interiors.
Corvette Store
Red Tag sale for GM
Buick Lucerne and the Pontiac Solstice, dealers said.
