Surprise: GM Extends Discount Program

The world’s largest automaker said they would extend their “Employee Discount Program For Everyone” plan for another month until August 1. Chrysler has already started their plan which started on July 1st and Ford also announced today the Ford “Family Plan” offering incentives and discounts.

“The GM Employee Discount for Everyone’ has been an effective way for us to continue to tell consumers about the great value represented in our cars and trucks,” said Pete Gerosa, GM North America vice president, Field Sales, Service and Parts in a press release.

General Motors desperately needed this punch, moving well over 500,000 vehicles as a result of the program since they lost $1.1 billion during the first quarter and their market share had fallen to its lowest in nearly a century. Toyota was coming for them too, particularly as Toyota expands its production of the hybrid engine automobiles.

This new deal for GM pushed sales 47% over the previous year and the highest they’d seen at all since 1986. The monthly market share had grown to 33%, up seven points from May. The problem GM may run into is declining market share after the promotion is over. In 1986, the sales were so high because of special incentives program and their market share skyrocketed. When it was over, it went back to what it was prior to the promotion.

“We were really pleased by the consumer and dealer response to our Employee Discount’ program in June,” Gerosa added. “Consumers told us that the simplicity and transparency of the program along with the clearly compelling employee price is a great idea. Buyers liked the fact that they could easily identify the employee discount price either at their local GM dealer or on our website, and our dealers, who enthusiastically support this program, told us that it drove a lot of new customers into their showrooms.”

Many auto market watchers expect this to drive prices down. With the combination of announcements today, many feel all automakers will have to sit up and take notice. They also commented it will be very difficult to for these companies to let up off of their incentives in fear of giving up that market share.

Unforuntately, some vehicles won’t be included in the incentive program. For GM, it will be the corvette and their medium duty pickup trucks. For Ford, it will be their hottest property, the new Mustang.

So much for being able to afford the Carroll Shelby tricked out GT500 Mustang this year.

John Stith is a staff writer for Murdok covering technology and business.