GM Slashes Auto Prices Yet Again to Clear Inventory

02 June 2005

Picking up on a weekend article in a Detroit newspaper, the Wall Street Journal on Wednesday predicted another program of massive price cuts by ailing auto giant General Motors.

Joe Public will be offered new 2005 cars at around the same price paid by GM staff, usually 3% to 4% below invoice price, according to model. The price can - and almost certainly will - be further lowered by dealer rebates.

According to the WSJ, GM dealers are piled high with unsold large SUVs as the clock ticks toward the crucial launch of the company's next-generation monsters, just a few months hence. Autodata reports that as at April 30, GM had 152 days' supply of its large Chevrolet Tahoe SUVs - over twice the optimum level.

Unless this embarrassing overload is reduced, and fast, dealers could delay ordering 2006 models. GM declined to comment on the story, presumably preferring to await Wednesday's announcement of the May sales figures.

Last month the company, the globe's largest automaker (by sales), unveiled a new product development and sales strategy that will all but eliminate the overlapping of brands between one marque and another [WAMN: 23-May-05].

This will see only the Chevrolet and Cadillac marques offering a full line-up of vehicles. Hummer and GMC will sell only trucks, while Pontiac, Saab and Saturn will focus primarily on cars and smaller SUVs. Buick will vend a limited range of both types.

Data sourced from Wall Street Journal Online; additional content by WARC staff