GM Price Deals Pay Dividends

30 June 2005

US number one car giant General Motors appears to have hit upon a solution to reverse falling sales and sagging profits.

Its 'employee discount' promotion, whereby anyone can buy a vehicle at the same price aa a GM worker, has boosted sales between 20% and 30% compared with recent months, and pushed June market share to 30%, from 25.4% across the first five months. Hard data will be released on Friday.

The automaker launched the promotion in an attempt to clear 1.2 million unsold 2005 vehicles before 2006 models arrive this fall - and to win over customers from other brands. It is due to run until July 5, but GM may now extend it, while rival Chrysler looks at a similar program.

And the reason for the promotion's apparent success? According to Jesse Toprak, analyst at online car-shopping service, it's down to buyers not having to negotiate: "They know they paid the same price their neighbor did."

Data sourced from USA Today Online; additional content by WARC staff