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steve88 said:
Everyone in Canada gets employee pricing on 2005 models!
It is too bad in one way, but I guess there is invertory that has to clear out. I hope they hold back on offering it on 2006 models.

I know GM claims it is helping them, but I really don't understand. When they are either loosing a little on each car sold, or just above the profit point on each car sold(depends on which article you read) before they offer the employee pricing, how can it be helping?? They almost have to be loosing on each car sold now, since all the discounts and rebates where offered on top of it....

todd
 

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Discussion Starter · #3 ·
We have 350 Vans in stock. It better help clear out the inventory. But It won't help us since 98% of our business is employee anyway.

Hope this information gives you guys the heads up!
 

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Gm has a fair amount of fixed costs they incur whether they sell a vehicle or not. The money they are getting for these cars (though less than they would like) is defintiely still additive. One of the issues they have is a contract they signed with the UAW where "laid off" or "furloughed" workers get close to their full pay whether they work or not, so effectively these are fixed costs. So all their corporate costs are fixed, labor costs essentially fixed, money already been spent builindg all the factories and tooling the lines for the specific vehicles - all of these combined are a pretty big compnent of their costs per vehicle. The variable costs would be marketing, parts, and shipping to dealers, and I would think the money they get even at discounted prices easily cover these costs.

The differential between the 3 domestic brands is not that great, so once GM has success with this program (similar to the 0% promotion post 9/11), F and Chrysler are forced to match. Also, similar to the 0% post 9/11 GM got a nice one month benefit by being the first to come up with this offer.
 

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300C SRT's or other hot selling DCX cars not eligible

Sorry folks...DCX is not that stupid...they are giving away the slower moving cars in their line up...no employee discounts for the HEMI"s !


:smoker: :nutkick:
 

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Employee discount doesn't apply to Magnums, Chargers, 300s, and the entire SRT lineup. What I think is driving the sales isn't so much the deals, but rather the "no haggle" aspect of employee pricing, although it isn't being spun like that. Just IMO.
RT
 

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SRT**8 said:
Gm has a fair amount of fixed costs they incur whether they sell a vehicle or not. The money they are getting for these cars (though less than they would like) is defintiely still additive. One of the issues they have is a contract they signed with the UAW where "laid off" or "furloughed" workers get close to their full pay whether they work or not, so effectively these are fixed costs. So all their corporate costs are fixed, labor costs essentially fixed, money already been spent builindg all the factories and tooling the lines for the specific vehicles - all of these combined are a pretty big compnent of their costs per vehicle. The variable costs would be marketing, parts, and shipping to dealers, and I would think the money they get even at discounted prices easily cover these costs.

The differential between the 3 domestic brands is not that great, so once GM has success with this program (similar to the 0% promotion post 9/11), F and Chrysler are forced to match. Also, similar to the 0% post 9/11 GM got a nice one month benefit by being the first to come up with this offer.
From a corporate point of view it's great. Their sales went up 41% for the month of June, compared to 1% for DCX. Offering the discount is not money out of the manufacturers pocket, since the price at "cost" hasn't changed. So the manufacturer has lost nothing, of course the franchise dealer doesn't make as much as he would like per single vehicle. But that's exactly why these programs are at "participating dealers only". So if they are that hell-bent on a profit per unit, they don't have to partake in it.
Lower prices equals more traffic, more sales, and more total profit.
 

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rt4 said:
Employee discount doesn't apply to Magnums, Chargers, 300s, and the entire SRT lineup. What I think is driving the sales isn't so much the deals, but rather the "no haggle" aspect of employee pricing, although it isn't being spun like that. Just IMO.
RT
The employee discount does apply to all Magnums, Chargers, 300's except the SRT's and the Sprinter which is a cargo van BUT only 2005's not the 2006 models, but only in Canada and the reason given is that they are assembled here. Cost saving on a 300C is about 5 grand, not including any incentives which may be available.
 

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Kridifur` said:
From a corporate point of view it's great. Their sales went up 41% for the month of June, compared to 1% for DCX. Offering the discount is not money out of the manufacturers pocket, since the price at "cost" hasn't changed. So the manufacturer has lost nothing, of course the franchise dealer doesn't make as much as he would like per single vehicle. But that's exactly why these programs are at "participating dealers only". So if they are that hell-bent on a profit per unit, they don't have to partake in it.
Lower prices equals more traffic, more sales, and more total profit.
My dealer just explained to me that they get rebated back from DCX on the "employee discount", so it seems that it does, indeed, come out of the manufacturer's pocket.
 

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Kridifur` said:
From a corporate point of view it's great. Their sales went up 41% for the month of June, compared to 1% for DCX. Offering the discount is not money out of the manufacturers pocket, since the price at "cost" hasn't changed. So the manufacturer has lost nothing, of course the franchise dealer doesn't make as much as he would like per single vehicle. But that's exactly why these programs are at "participating dealers only". So if they are that hell-bent on a profit per unit, they don't have to partake in it.
Lower prices equals more traffic, more sales, and more total profit.
This is incorrect. GM corporate reinbursts the dealership for each car sold under the employee program. GM is doing a great job with the media on this campaign, as it hasn't helped their overall issue....The cars they build are overpriced and boring. When the employee price brings those GM vehicles down into a competitive range with other cars in the segment, GM is able to sell some cars(plus, the advertising is catching anyone who doesn't know much about buying cars). The reality of situation will be when a research group reports how much this program cut into GM's profits per car, however, if you can't sell the cars and need a discount to sell them, another arguement can be made. Either way, GM still has a poor lineup of vehicles when compared to other makes and this program is only a temporary fix for the serious problems. DCX also has several models that fit into this scenerio. I am disappointed to see the program offered on Hemi vehicles, though.

Todd
 
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