GM 72-Hour Giveaway May Prop-Up June Sales

gm 72 hour giveaway may prop up june sales

We're getting reports from the front line that GM's 72-hour sale is a success– of sorts. One dealer reports that business was so brisk that both the Dealer World system (used to verify codes. locates, ordering, and more) and GMAC's computer comms crashed. "The F&I guys had to use the fax, then phone and stay on hold for an hour." Popular models are… gone. "Try and find a Cobelt or HHR at the ZERO for 72. Can't be done." Another dealer reported that he'd sold 15 additional units during the sale, a number he called "substantial." Which is, of course, a relative term. IF this plays out across the country, GM's Black Hole Tuesday numbers will be bad, but they won't be as bad as analysts' predictions. The downside: the prices– hence profits– are scary low. Loaded 1/2 ton pickups are walking out the door for $200 per month. And GMAC is ignoring the "when you're in a hole stop digging" maxim; offering low credit score buyers up to 150 percent loans (to get them out of their backwardsness). Worst of all, July and August. Despite the hit to the bottom line, and the long-term damage to GM's pricing, metal is being moved. Short-term thinking GM may extend the sale. The question is, can it afford to?

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  • Joeaverage Joeaverage on Jul 01, 2008

    I don't see any problem with buying the "right" domestic products. There are a few. Show them the way. On the other hand if they have to rise from the ashes of their legacy I think they might be smarter and stronger in the long run. Too many years of easy money makes any company or country complacent and easy to pass by with a few bright minds. Right now our country needs us to get alot smarter and quit screwing around to meet the challenges of the global economy - and I don't mean by purchasing SUVs or more Chinese crap.

  • ZoomZoom ZoomZoom on Jul 01, 2008

    I was going to write a clever missive about how we should not help the inferior survive when it's DNA is so badly inadequate for survival... However, something else occurred to me on my way to my epiphany... (insert tongue in cheek) Maybe this is not GM's fault, after all. I say we blame it on the automotive SPECULATORS. Those people waiting for the next great giveaway, the next great rebate, even more cash on the hood! Yes, they are speculating on future price declines, and that's why GM can't make any money! Evil speculators and dirty wabbits! (/remove tongue from cheek)

  • R H R H on Jul 01, 2008

    I thought the 72 hour sale was quite interesting, however I just can't justify another car at this point. My wife & I, between us, have a sports car, a sports bike, a 9 year old econobox that has nothing wrong with it (neon), and I am looking at an econo-bike (250cc ninja or dual sport). Not really sure exactly what I'd do with a 5th vehicle....and I'm an apartment dweller! Where would I _PUT_ a 5th vehicle? I know some other people in a similar situation....My brother in his household (him, wife, sister-in-law, mother-in-law) I think have 3 or 4 cars (pilot, sedan of some sort, smart) +a 125cc scooter (vino)

  • WildBill WildBill on Jul 01, 2008

    Probably a good strategy to "move the metal." Back in the 50's when the Massey-Harris-Ferguson (now Massey Ferguson) tractor and ag machinery company was still in it's early years they had a tremendous backlog of tractors and were burning cash to the point of being only months from closing the doors for good. New management came in, at the behest of the investors, and cleared it out (something like 5,000 units) at a cost lower than the cost to mfg. it and closed the production lines down, but it gave the company a several million dollar cushion (sorry, don't have the article here for the exact amount) to the point they could re-start the production lines later in the year and bring out new tractors and machinery in the now familiar red and grey color scheme with the new name. You can still buy the red and gray beasts today as a result of that heroic decision. Another interesting item, they had 100% defects for tractors coming off the line. The plan was move it out and fix it later. The article showed a picture of a sea of brand new units, every one had some defect to the point it couldn't be sold, some were even considered unfixable. A new quality program was implemented and defects were down to 0% in a matter of months. Shows what good mgmt. can do if it will.