GM Cuts Sticker Prices to Provide Even More Value

[Guest Josh]

Consumers Benefit Through Simplified, More Competitive Pricing

DETROIT – GM today announced that it has significantly lowered Manufacturer’s Suggested Retail Prices (MSRPs) on vehicles accounting for about 80 percent of its sales volume. This move covers every Chevrolet, Buick and GMC model, as well as most Pontiac cars and trucks. The new MSRPs are effective Jan. 11. This is the next step in GM’s initiative to simplify pricing and offer consumers the best value in the industry.

Combining this price repositioning with adjustments made to MSRPs at the beginning of the 2006 model year, GM has lowered MSRPs on vehicles representing about 90 percent of its volume.

“This is a big step for us and arguably the biggest price repositioning in our history,” said Mark LaNeve, GM vice president, North America Vehicle Sales, Service and Marketing. “This move is in line with our customers’ desire for simple, compelling prices.”

Under the new pricing structure, MSRPs on many GM vehicles have been lowered, some by as much as $2,500.

LaNeve explained that GM’s aggressive pricing action taken at the beginning of the 2006 model year was effective in the improving sales performance of the new launch products. This action allowed for clearer comparisons to competitive vehicles and pricing simplicity. It also enabled the nearly two-thirds of new vehicle buyers using the internet to research their vehicle purchase and get strong MSRP comparisons. Evidence of the consumer appeal of this approach became apparent when new products like the Chevrolet Impala and HHR, Pontiac Solstice and Cadillac DTS – introduced with very compelling prices - experienced strong sales following their launch.

“Starting right now, we are going to communicate a clear, simple message,” LaNeve added. “In more segments, with more brands, GM has a great product at a great price, and in many cases, we have the best product at the best price. Customers can compare for themselves not only on our own websites, but on Head2Head at Edmunds.com.”

Pricing for much of the Cadillac lineup already is well-positioned. With today’s announcement, CTS and SRX MSRPs also were repositioned. 2007 Escalade pricing will be announced next week.

Among Saturn models, only Relay was repositioned. Saab and HUMMER also are not included in today’s announcement. Vehicles for these brands are competitively priced.

“As we head into 2006, we’re launching 19 new products that represent over 1.5 million vehicle sales,” LaNeve said. “Today’s action allows us to talk more about the features and benefits of all of our vehicles and to spend less time talking about ‘the deal.’”

General Motors Corp. (NYSE: GM), the world’s largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM today employs about 325,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. GM’s global headquarters are at the GM Renaissance Center in Detroit. More information on GM can be found at www.gm.com.

[ponchoman49]

A definate step in the right direction. Hopefullt cars like the Buick LaCrosse CXS, Grand Prix GT, Cobalt LTZ, all the higher end minivans etc will have more down to earth price tags. People most always compare window stickers and features, not what new fire sale of the month that may come along. I'm curious which vehicles were affected most.

[avant1963]

Some examples of prices changes on Chevrolet vehicles:

# The new base price of the 2006 Cobalt LS coupe will be $12,990 including shipping charges. That is $1,500 less than the current base price of $14,490.

# The new base price of the Impala LS will be $20,990, $1,000 less than the current base price.

# The Silverado regular cab WT will be repriced to $16,990, down $2,275 from the current base price. The Crew cab version of that truck will be repriced to $25,490, $2,500 less than the current base price.

http://www.autonews.com/apps/pbcs.dll/arti...ct=newsletter08

[intrigued]

does anybofy have a list of new priceinmg compard to old pricing for all cars and trucks? Id love to see.

[pow]

Wow, this is excellent news that truly makes GM cars more competitive.

[b4z]

Lower pricing may not be what it seems.

I have heard that in many cases the MSRP drops but the invoice remains the same.

So it doesn't really help us savvy shoppers.

[bobo]

Here's a comparison of the changes in prices for the Lucerne and LaCrosse:

Lucerne CXS before/after: $35,265/$34,265 GMS before/after $31,637/$31,427

LaCrosse CXS before/after: $28,435/$27,330 GMS before/after $25,239/$25,081

The MSRP of the Lucerne is down $1,000, but I imagine the invoice hasn't gone down by much. The employee price is down by only $200.

For GM employees, the LaCrosse price went down by only $150, but the rebate went down from $1,500 to $500, so now the car costs $850 more.

This is seeming to be like more smoke and mirrors.

[caddycruiser]

Here's a comparison of the changes in prices for the Lucerne and LaCrosse:

Lucerne CXS before/after:  $35,265/$34,265 GMS before/after $31,637/$31,427

LaCrosse CXS before/after:  $28,435/$27,330 GMS before/after $25,239/$25,081

The MSRP of the Lucerne is down $1,000, but I imagine the invoice hasn't gone down by much.  The employee price is down by only $200.

For GM employees, the LaCrosse price went down by only $150, but the rebate went down from $1,500 to $500, so now the car costs $850 more.

This is seeming to be like more smoke and mirrors.

That's what I was just thinking after I first thougt "Wow, good."

As long as the transaction prices are the same in the end, having to cut off an even smaller piece of sticker to get to that point should help regardless, especially when it comes to things like overall value and resale perception.

Guess we'll just have to wait and see the effect. B)

[avant1963]

All this is to make GM cars more competitive for "internet shoppers".

The Grand Prix GXP is down to $27,500 base price. That looks better in Edmunds than $30,000.

[Matt276]

What GM does not understand is, for example, giving cars better interior and standard side air bags, ABS... would cost a few hundred bucks and could help sell them with less rebates.

[Guest Josh]

General Motors Corp. is taking a major step in reducing its dependence on eye-popping rebates by slashing sticker prices up to $2,500 on 57 of 76 new vehicle models sold in North America.

The move -- affecting every Chevrolet, Buick and GMC model as well as most Pontiac cars and trucks and select Cadillac vehicles -- is fraught with risks for the world's largest automaker.

While it could establish a more sustainable pricing strategy, it could backfire if deal-conscious consumers look elsewhere. GM's previous attempts over the past year to lower vehicle prices and drop incentives have failed to draw buyers.

GM believes the cuts, which will average $1,300, will help win over the growing number of consumers who use the Internet to comparison-shop among vehicles. The automaker's discounts -- which can run as high as $4,000 -- aren't always reflected on new model prices quoted on online shopping sites, making many GM vehicles appear substantially more expensive than rival models.

"The idea is to make sure that if you want to buy one of our cars, you don't have to wait for a deal; it's there every day," GM Chairman Rick Wagoner said Tuesday.

While analysts generally viewed the new strategy as a positive step, they said GM will face challenges by lowering or eliminating discounts and trying to convince consumers its cars and trucks can stand with the best in the world.

Full story & images: http://www.detnews.com/apps/pbcs.dll/artic...427/1148/AUTO01

[CARBIZ]

BLAH, BLAH, BLAH. Shuffling the deck, once again. They are desperately seeking positive PR, but it is always about PRICE, isn't it?

Up here in the Hinterland, they just jacked the rates and dropped the residuals on most everything - now I have to call a customer back who was in last night that his Colorado lease payment will go up $9 a month! Do you think he will believe me that it is his fault that he didn't sign last night and that GMAC is the culprit, or will he go around slamming dealers publicly because we are all a bunch of crooks?

How does a customer understand that in 12 hours the payment he was quoted will jump $9?

[Clownzilla]

BLAH, BLAH, BLAH.  Shuffling the deck, once again.  They are desperately seeking positive PR, but it is always about PRICE, isn't it?

  Up here in the Hinterland, they just jacked the rates and dropped the residuals on most everything - now I have to call a customer back who was in last night that his Colorado lease payment will go up $9 a month!  Do you think he will believe me that it is his fault that he didn't sign last night and that GMAC is the culprit, or will he go around slamming dealers publicly because we are all a bunch of crooks?

  How does a customer understand that in 12 hours the payment he was quoted will jump $9?

That's a tuff one. I think our dealership is in the same situation with a customer. You are right............they won't beleive it and will think we are crooks.

[Cortazzo]

It's good they are dropping the price on the CTS, especially the 2.8l version. THe product is near the end of it's lifecycle, and honestly, in 2.8l trim it's not worth more than 30k. This will keep volume high for the end of production and hopefully snag some acura or bmw intenders to the general.

In general l like the idea of having realistic MSRPs, Chrysler does this with their LX cars, and they are worth paying their reasonable stickers for.

[regfootball]

BLAH, BLAH, BLAH.  Shuffling the deck, once again.  They are desperately seeking positive PR, but it is always about PRICE, isn't it?

  Up here in the Hinterland, they just jacked the rates and dropped the residuals on most everything - now I have to call a customer back who was in last night that his Colorado lease payment will go up $9 a month!  Do you think he will believe me that it is his fault that he didn't sign last night and that GMAC is the culprit, or will he go around slamming dealers publicly because we are all a bunch of crooks?

  How does a customer understand that in 12 hours the payment he was quoted will jump $9?

maybe he should have closed the deal last night, then.

[regfootball]

"While analysts generally viewed the new strategy as a positive step, they said GM will face challenges by lowering or eliminating discounts and trying to convince consumers its cars and trucks can stand with the best in the world."

Dammit. they have to pick away at everything, the 'analysts' and press. Now that GM is cutting stickers, like they should...they'll get ripped for that!

they can't win.

[VenSeattle]

Here's a comparison of the changes in prices for the Lucerne and LaCrosse:

Lucerne CXS before/after:  $35,265/$34,265 GMS before/after $31,637/$31,427

LaCrosse CXS before/after:  $28,435/$27,330 GMS before/after $25,239/$25,081

The MSRP of the Lucerne is down $1,000, but I imagine the invoice hasn't gone down by much.  The employee price is down by only $200.

For GM employees, the LaCrosse price went down by only $150, but the rebate went down from $1,500 to $500, so now the car costs $850 more.

This is seeming to be like more smoke and mirrors.

Well, I wouldn't imagine invoices dropping much, if any, because it's not costing GM any less to build these vehicles. The good that's come from this is that the Lucerne is now even more competitive to the Avalon and the price difference between the Limited & CXS is pretty much gone($450 difference):

Avalon XL: $26,625*

Avalon XLS: $31,075*

Avalon Limited: $33,815*

Lucerne CX: $25,265*

Lucerne CXL V6: $27,265*

Lucerne CXL V8: $29,265*

Lucerne CXS: $34,265*

(*Shipping/destination charges not included)

[daves87rs]

Some examples of prices changes on Chevrolet vehicles:

# The new base price of the 2006 Cobalt LS coupe will be $12,990 including shipping charges. That is $1,500 less than the current base price of $14,490.

# The new base price of the Impala LS will be $20,990, $1,000 less than the current base price.

# The Silverado regular cab WT will be repriced to $16,990, down $2,275 from the current base price. The Crew cab version of that truck will be repriced to $25,490, $2,500 less than the current base price.

http://www.autonews.com/apps/pbcs.dll/arti...ct=newsletter08

Hmm..I hope they can keep this idea rolling for the next few years....keep the current prices, update the cars, offer a little more standard, and this could get

people to keep looking at GM products...

A Cobalt at that price could sneek ne into one...

[Teh Ricer Civic!]

ooo cobalt base of 13k?? thats a real bargain compared to others in that class!

[CadillacCTS]

Lower pricing may not be what it seems.

I have heard that in many cases the MSRP drops but the invoice remains the same.

So it doesn't really help us savvy shoppers.

You are 100% right. We got the dealer breakdown of the pricing today and you are right, the MSRP has changed, but invoice is the same.

[mjdecker]

Solstice rose in price... it's now at $20,490 MSRP

[Stubbles]

It does make things "seem" better. I paid 21,500 for my Cobalt SS Supercharged with the GM employee pricing....MSRP = 23,440.....The MSRP of the same car now 21,960. so instead of saving $2,000 i guess i only saved $500. (than if i would have bought it now.)

BTW: That really sucks for anybody who bought a car yesterday!

[daves87rs]

It does make things "seem" better. I paid 21,500 for my Cobalt SS Supercharged with the GM employee pricing....MSRP = 23,440.....The MSRP of the same car now 21,960. so instead of saving $2,000 i guess i only saved $500. (than if i would have bought it now.)

BTW: That really sucks for anybody who bought a car yesterday!

Very true....

[Chicagoland]

GM buyers now have to be trained that $4000 off an inflated sticker is just as good as $1000 of a real world sticker price.

Edited January 12, 2006 by Chicagoland

[bobo]

If the invoice remains the same, this new pricing scheme does nothing to wean customers from the big rebates. Is this supposed to make people feel they are getting a better deal? Why would the dealers support this? You bargain less from the sticker, and then the rebates are also less. Who are they fooling?

[cmattson]

Most educated people will be able to do the simple math and realize that the net vehicle price is remaining the same. The important thing is that this will *unquestionably* raise GM resale values. I applaud this move by GM. Didn't we all want GM to just drop the stick and do away with the B-S? I know I did..

[VenSeattle]

Facelifted 2006 Malibus are very inexpensive now:

2006 Chevrolet Malibu LS: $16,365

2006 Hyundai Sonata GL: $17,895

2006 Malibu SS w/240hp is only $22,865

2006 Toyota Camry SE V6 is $24,025

2006 Honda Accord LX V6 is $25,100

2006 Mits Galant LS 230hp V6 is $22,999

[VenSeattle]

If the invoice remains the same, this new pricing scheme does nothing to wean customers from the big rebates.  Is this supposed to make people feel they are getting a better deal?  Why would the dealers support this?  You bargain less from the sticker, and then the rebates are also less.  Who are they fooling?

Why do you think they're trying to fool anyone? Invoice prices aren't what control the big rebates... it's the inflated MSRPs that do. The MSRPs are now much closer to actual transaction prices and lower than many competitors.

Yes, less is coming off the MSRPs to reach the same sale price, but the point is to offer a good price right from the start. When someone performs comparative research on a car website and sees the GM vehicle at a similar price or even thousands below that of competitors it will eventually give the impression of a good value. This also (as recently mentioned) helps GM vehicles to maintain a higher resale value since the MSRPs are no longer inflated.

[bobo]

People are conditioned now to pay slightly below the invoice price and then take the rebate off from that. If GM lowers the rebates commensurate to what they've lowered the MSRP, the bottom line price will be a lot higher. That's great for GM if people will pay that much, but they won't. My point is that the invoice prices are too high.

[Northstar]

This sounds like value pricing but actually cutting the sticker price by more than $500. I think it will be good in the long run but GM's just going to have to tough it out and fight through the first couple of months and take some hits.

[pow]

Here's a comparison of the changes in prices for the Lucerne and LaCrosse:

Lucerne CXS before/after:  $35,265/$34,265 GMS before/after $31,637/$31,427

LaCrosse CXS before/after:  $28,435/$27,330 GMS before/after $25,239/$25,081

The MSRP of the Lucerne is down $1,000, but I imagine the invoice hasn't gone down by much.  The employee price is down by only $200.

For GM employees, the LaCrosse price went down by only $150, but the rebate went down from $1,500 to $500, so now the car costs $850 more.

This is seeming to be like more smoke and mirrors.

Sad, especially when you consider that the LaCrosse was already overpriced. By contrast, the Lucerne's pricing was acceptable.

[ponchoman49]

Facelifted 2006 Malibus are very inexpensive now:

2006 Chevrolet Malibu LS: $16,365

2006 Hyundai Sonata GL: $17,895

2006 Malibu SS w/240hp is only $22,865

2006 Toyota Camry SE V6 is $24,025

2006 Honda Accord LX V6 is $25,100

2006 Mits Galant LS 230hp V6 is $22,999

Lets not forget too that the Malibu for $16365 is an automatic and has several features not available on the Sonota like std telescoping wheel, fold flat passenger seat, trip computer and outside temp, automatic headlights, DRL's, floormats etc. The automatic Hyundai starts at $18795 but does have side curtain airbags and ABS/stability control included. Still if you were looking for an above average commuter that gets good mileage, the Malibu at $16990 with dest is a good buy.

[andy82471]

This sounds like value pricing but actually cutting the sticker price by more than $500. I think it will be good in the long run but GM's just going to have to tough it out and fight through the first couple of months and take some hits.

Exactly, I am sure sales is going to take a hit in the short term. I just hope GM doesn't panic and start resorting to the EPP and Red Tag sales scheme, which absolutely does nothing for profit and greatly reduces resale value.

[Guest gmrebirth]

http://detnews.com/apps/pbcs.dll/article?A.../601120377/1148

"A day after General Motors Corp. announced a major plan to cut sticker prices on most U.S. vehicle models, it quietly introduced a new incentive program for dealers to help them sell some models.

The automaker is offering its dealers $250 "instant value certificates" that can be used as closing tools in the sale of GMC and Chevrolet SUVs and pickups, according to a letter sent to GM dealers Wednesday that was obtained by The Detroit News.

Each dealer will be given a specific number of certificates based on sales volume and other criteria and can offer customers up to four certificates -- or $1,000 in rebates -- to close a sale."

-----

I smirked when I saw this; it comes as no surprise at all to me.

I think GM realistically will not be able to get away from incentives and discounts for a LONG time.

But this makes things worse for dealers, as MSRP has been lowered, so they have even less flexibility when trying to make a sale.

[cmattson]

Ahh, customer-incentives are one thing, dealer-incentives are another. Honda and Toyota work under the dealer-incentive models. They don't advertise discounts, but they are available if you, as a buyer, push the dealer for them. Again, one of the biggest points of this lower-price program is that this will inflate residual % measureably.

Let's take a "base" Malibu:

'06 pricing is: 16,990 (trim level is called "1LS")

'05 pricing was: 19,200 (trim level is callsed "BASE 1SA")

How does that "base" Malibu age? Kelly's blue book lists the resale of an '05 as $15250. With '05 pricing, this 1-year old vehicle has lost 20.57% of it's value. With '06 pricing, it's nearly HALF that -- only 10.24%

For comparison:

2005 Honda Accord DX (auto) Sedan: new=$17095, resale=$14195 (16.96%)

2005 Toyota Camry Std (man) Sedan: new=$18,185, resale=$16,800 (7.7%)

All numbers gathered @ autos.msn.com, which uses Kelly's Blue Book for it's used vehicle pricing.

Edited January 12, 2006 by cmattson

[Mule Bakersdozen LS]

Sounds like better pricing, more to where they should be, such as in the case of the Chevrolet Cobalt LS and more or less, Buick Lucerne. That LaCrosse CXS is still way too high, considering a much nicer, more desirable Lexus ES330 is like $32,000.

[Shantanu]

This is what I've been saying GM should do for about 2 years now: an across the board price cut.

[CARBIZ]

This is a double edged sword, but I am with VenSeattle on this one. A lot of people comparison shop window stickers when the dealers are closed, or via the internet. If you look at the window sticker on a Corolla and a Cobalt, they are close (in this market) but only a few potential customers would know that the Cobalt price can be much lower, due to package credits, etc., while Toyota rarely moves off that price and if it does it isn't by much. A good salesperson (ahem, like me) can point this reality out, but if we are closed there is no one around to explain that. Lower sticker prices can help this.

HOwever, as the employee pricing showed us last summer, customers already believe the dealer makes THOUSANDS of dollars on a Cobalt anyway, so with lower sticker prices, they still want to haggle that. Not a pretty prospect.

Personally, I prefer it this way: I'd rather get the customer off price anyway.

I hope GM knows what it is doing. If we can get through 2006 and more product comes our way (hybrids, RWD platforms, more crossovers, etc.) then we MAY some day be able to stay off price, like Toyota does now.

[Newbiewar]

http://detnews.com/apps/pbcs.dll/article?A.../601120377/1148

"A day after General Motors Corp. announced a major plan to cut sticker prices on most U.S. vehicle models, it quietly introduced a new incentive program for dealers to help them sell some models.

The automaker is offering its dealers $250 "instant value certificates" that can be used as closing tools in the sale of GMC and Chevrolet SUVs and pickups, according to a letter sent to GM dealers Wednesday that was obtained by The Detroit News.

Each dealer will be given a specific number of certificates based on sales volume and other criteria and can offer customers up to four certificates -- or $1,000 in rebates -- to close a sale."

-----

I smirked when I saw this; it comes as no surprise at all to me.

I think GM realistically will not be able to get away from incentives and discounts for a LONG time.

But this makes things worse for dealers, as MSRP has been lowered, so they have even less flexibility when trying to make a sale.

They have been doing this for the past few months...

[gmwsag]

Oh, yes. Oh, yes. This is why Toyota will become the #1 manufacturer in the world. General Motors is actually losing money by lowering prices EVEN FURTHER than they already have. This is showing the problems that American automakers are having. By lowering their prices, they lower the profits, and they are seeing more red than green. Sure, they'll save $4 billion but that doesn't mean that they won't have to use it to slash costs.

I sat in a base-base Cobalt LS (yea, the one for under $13K). It is the nastiest thing ever. Roll up windows. Fleet-like cloth. Plastic everywhere. We are talking about MSRP's and base-prices. These models don't sell because they don't have any features (most ironically, Chevy didn't put power windows and locks but didn't forget a CD player). It is time to wake up and get out of the coffin. The true thing is not improving a little bit of your lineup, but all of it. While Daewoo redesigned the Aveo just 2? 3? years after we first saw it, Chevy is holding onto the aging Malibu as long as it can. The Malibu wasn't a competitor from the start. It can't compete at all.

GM is bringing out new models that aren't quite new. The Chevy Impala is built off the same platform. It just LOOKS new. Sure, 303 horses under the hood is a good thing to brag about. Why doesn't GM just keep a darn V-6 in there and improve interior quality? Plastic is still everywhere on these cars! Sure, the new Tahoe is nice. The GMT-900s are a real improvement. What about the CTS? Why are you keeping a line that is nearly 5 years old and aging fast! Now, we have to wait another 2 years to see Bluetooth...if at all. We have to wait another 10? 15? 20? to see Bluetooth in the GMT-900s because they forgot to put it in there.

And, while GM beefs up its premium divisions with luxury features, Toyota is doing the same...in their value model Camry. This is a horrible embarrasment. GM is going into the tubes. They are doing EVERYTHING possible to avoid bankrupty. Hah, don't I feel for Kerkorian.

[gmwsag]

only 10.24%

Nice improvement. Unfortunately, that doesn't exceed Toyota's total. GM can't be innovational unless it starts thinking about efficiency and interior quality. This will improve the retention rates of their models.