AOL Money & Finance

General Motors to continue employee pricing

General Motors Corp. (NYSE: GM) will offer customers wanting to buy its cars the same discounts as employees for another four weeks, according to Bloomberg News.

The incentives, on most 2008 and some 2009 models, were to have expired today but, according to Bloomberg, "GM will continue the deals through the end of the month because the initial two-week offer boosted sales."

Of course, this is great news for consumers, particularly the few who are confident enough in their economic circumstances to be in the market for a new car. Maybe it will encourage people leaning toward a Honda (NYSE: HMC) or some other foreign automaker to give GM a second look or even a third one. Chances are, though, it won't do much to help.

As my colleague Michael Rainey
noted earlier, imports accounted for 68% of all passenger car sales in the U.S., a new low for the Big Three. These are the vehicles that consumers stung by high gas prices are most interested in purchasing. Good luck in trading in your gas-guzzling SUV for a fuel-efficient hybrid. Many dealers are reportedly no longer interested in the big vehicles because their trade-in value has plummeted.


Overall, though, this is bad news for the company that for now is the world's largest automaker. GM and the other makers need to load up each car with so many incentives that their profit margins are continuing to erode. The problem with this strategy is that once you start it, it's difficult to stop.

General Motors probably will have to continue its employee pricing marketing program through at least the end of the year. Even then, it will not do the company's shareholders, who have seen their holdings decline more than 57%, much good. The automaker, though, has little other choice because its problems are so huge.
Get the latest on cars and trucks
from GM and all brands at AOL Autos.

Reader Comments (Page 1 of 1)

Symbol Lookup
IndexesChangePrice
DJIA+17.4610,023.42
NASDAQ+7.122,112.44
S&P 500+2.671,069.30

Last updated: November 09, 2009: 01:35 AM

BloggingStocks Exclusives

Hot Stocks

Learn More About GM Cars

General Motors Brands:
Find Your Next Car

AOL Autos New Cars and Used Cars

DailyFinance Headlines

Latest from BloggingBuyouts

TheFlyOnTheWall.com Headlines

    BioHealth Investor Headlines

    WalletPop Headlines

    My Portfolios

    Track your stocks here!

    Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

    BloggingStocks Partners

    More from AOL Money & Finance

    WalletPop Headlines