Another not so wise move by GM?
General Motors recently announced that it will offer employee pricing to the general public on most GM vehicles from the beginning of June until July 4th. Now its a good deal for the public if they are looking to buy a GM vehicle, although I myself hardly even considered GM due to all of their quality issues when I was recently shopping for a vehicle. The reason the move may not be that wise is actually two reasons: 1.) You lose a big chunk of profit per car sold, meaning you have to sell many more to make the same profit and 2.) Its a short term band aid for a long term problem. What will they do to attract buyers once this is up?
GM has improved their quality and they have closed the gap somewhat on the Japanese, but they are still not there. Look at small cars, Toyota has the Celica and now the red hot Tc, Honda has the Civic (redesigned for 06) and Chevy has the Cobalt. Which would you buy? In the sedan category while the Malibu is improved and is cheaper than its competition, unless you are a die hard buy American kind of person, I doubt you will buy a Malibu instead of an Accord, Altima or Camry or even a Civic or Corolla. Last, but not least the category they have ruled with Ford is under attack from a pretty good crop of Japanese built trucks and suv's. And in the luxury market, Lexus beat Cadillac in their first year out of the gate and have never looked back. Long term GM has to find a way to get people to buy their cars without the tons of incentives they have to offer to entice buyers to buy a GM product. But they have not figured out a way to do that thus far.
Here is the article if you want to read it:
http://news.yahoo.com/s/ap/gm_discount;_ylt=Au_YXV0a0rxQzYbGjJ604Aes0NUE;_ylu=X3oDMTA2bm5xNHVjBHNlYwNtcA--
GM has improved their quality and they have closed the gap somewhat on the Japanese, but they are still not there. Look at small cars, Toyota has the Celica and now the red hot Tc, Honda has the Civic (redesigned for 06) and Chevy has the Cobalt. Which would you buy? In the sedan category while the Malibu is improved and is cheaper than its competition, unless you are a die hard buy American kind of person, I doubt you will buy a Malibu instead of an Accord, Altima or Camry or even a Civic or Corolla. Last, but not least the category they have ruled with Ford is under attack from a pretty good crop of Japanese built trucks and suv's. And in the luxury market, Lexus beat Cadillac in their first year out of the gate and have never looked back. Long term GM has to find a way to get people to buy their cars without the tons of incentives they have to offer to entice buyers to buy a GM product. But they have not figured out a way to do that thus far.
Here is the article if you want to read it:
http://news.yahoo.com/s/ap/gm_discount;_ylt=Au_YXV0a0rxQzYbGjJ604Aes0NUE;_ylu=X3oDMTA2bm5xNHVjBHNlYwNtcA--
posted by bigalsbeans at 1:43 AM
1 Comments:
GM and Ford seem to have learned very little after 30+ years of strong Japanese competition. Caterpillar faced a similar challenge from Komatsu and lost a billion dollars in three years in the 1980s. They made some major adjustments and have long since left Komatsu in the dust. Chrysler actually had original ideas like the minivan. GM created Saturn, but today that division is barely distinguishable from Chevy or Pontiac. GM has had some good marketing ideas like OnStar and the GM Card, but seems clueless on how to build cars that people want.
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