GM Gets A Clue

USAToday (06.29.05):

“Preliminary June data from analysts show that the [employee-discount] program, which grew out of employee suggestions, is wildly successful. It appears to have boosted GM sales 20% to 30% compared with recent months and pushed June market share to 30%, from 25.4% the first five months. And it isn’t costing GM much more than its previously ineffective rebates.”

GM’s employee-discount offer on new autos pays off

“‘The No. 1 reason this promotion is succeeding is not that people are getting great deals, but that they don’t have to negotiate. They know they paid the same price their neighbor did,’ says Jesse Toprak, analyst at Edmunds.com, an online car-shopping service.”

So you can actually buy a new car without that sneaking suspicion you’re being screwed. Marvelous.

“GM’s employee price is what a dealer actually pays for a vehicle, about 4% less than the dealer’s invoice price. The invoice includes a profit, called holdback.”

“To compensate dealers for selling vehicles at no profit, GM gives them 5% of the window-sticker price, an average of about $1,500 a vehicle.”