GM Stays With 'Employee Prices' Promo

29 August 2005

US number one carmaker General Motors is sticking with its 'employee price' marketing strategy to move more vehicles from dealers' lots.

The promotion, introduced in June to clear 2005 models, was quickly aped by rivals Ford Motor Company and Chrysler. It is now being extended through September and will include certain 2006 models.

Despite an increasingly skeptical view of the scheme by industry experts, GM spokeswoman Brenda Rio says the program has been "really successful and we want to continue the momentum".

Dealers and analysts are questioning how the auto giants can wean customers from the expectation of 'employee discounts' and persuade them to pay higher 'value' prices for newer models.

And to rub salt into an open wound, Japanese rivals such as Honda, Nissan and Toyota still increased sales in July despite the US-makers' price promotions. August figures are expected to be announced later this week.

  • Meanwhile, Ford has announced that 30% of this year's $1 billion-plus (€812m; £554m) marketing budget will go on directly targeted media, a rise of 10% over last year.

    This includes direct mail, video-on-demand, cellphone ads, sponsorships, customer relationship marketing and the web. It is the latter that will receive the biggest boost, with 15% of the budget being allocated to it.

    Ford says its dealers close one in five sales begun online, and more than 115,000 consumers who visited the company's website in the first half of 2005 picked options and priced the new Fusion model, launching this fall.

    Earlier this month the company unveiled a draconian restructuring plan across its North American sales and marketing organization, bringing the Ford and Lincoln-Mercury brands under the same managerial umbrella [WAMN 09-Aug-05].

    Data sourced from Wall Street Journal Online and Data sourced from; additional content by WARC staff (USA); additional content by WARC staff