Big Three automakers weigh discount offers - East Valley Tribune: Business

Big Three automakers weigh discount offers

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Posted: Monday, August 1, 2005 11:56 am | Updated: 9:47 am, Fri Oct 7, 2011.

DETROIT - General Motors Corp. ended its employee-discount incentive program Monday but was hoping to extend its summertime sales boom by lowering prices and adding features to its 2006 models.

Ford Motor Co. and DaimlerChrysler AG, which also allowed customers to pay the employee price for their vehicles in July, were deciding Monday whether to continue the popular plans through August.

GM saw its sales jump 41 percent after it introduced employee-pricing in June. Automakers were scheduled to release July sales figures Tuesday.

GM said Monday it is changing the prices of 30 of its 76 models and is adding features to other models to make them more competitive. Under the new pricing strategy, the base price of the Chevrolet Malibu is $17,990, or $1,835 below the 2005 model, while the base price of the Saturn Ion sedan is $12,490, or $2,455 lower than the 2005 model.

Other vehicles will have new standard features. For example, Buick is adding a four-year, 50,000-mile warranty, parking assist alerts and a theft-deterrent system to the Rendezvous sport utility vehicle without raising the base price of $27,465.

According to Autodata Corp., GM spent an average of $4,458 per vehicle on incentives in June, higher than any other automaker. With its 2006 models, the world's largest automaker hopes to wean customers away from incentives in favor of lower prices.

GM has said customers researching vehicles on the Internet have found it difficult to see what price they would pay for a vehicle, since incentive deals weren't included in the base price. The new strategy should help alleviate that problem, GM said.

"It's real simple. Americans love a great value and know it when they see it," said Mark LaNeve, GM's vice president of North American sales and marketing.

Some analysts have questioned whether GM's strategy will be successful, saying the company has conditioned customers to expect incentives ever since introducing zero-percent financing plans in the wake of the Sept. 11, 2001, terrorist attacks.

GM shares were down 7 cents to $36.75 in early afternoon trading on the New York Stock Exchange. Ford shares were up 6 cents to $10.80 and DaimlerChrysler shares were up 85 cents to $49.27.

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