Friday, January 06, 2006

The "Total Value Promise"

GM has a great idea for increasing its total sales and increasing its revenues. I am not being sarcastic; it really is a good idea. What is that great idea? Lower initial prices. The Detroit News carries the story.

Rather than give incentives to buy they will simply lower the initial price of the vehicle and they are going to begin doing it this year. They believe the simplicity of this will be more effective than the complex thinking behind incentives. This is a very important start but will not in and of itself save the company. They also need to look at their product itself and their costs (especially their inflated labor and management costs.) I believe they are finally doing this and wish they had been doing it 25 years ago.

The article also points out something GM did do for America that America was ungrateful for; they effectively lowered the prices of vehicles through 0% financing after 9-11 to help sustain the US economy during that tough time.

10 Comments:

Blogger ABFreedom said...

It will probably work for a large segment of the population, but I don't know how much it would increase their bottom line. The biggest complaint I here about GM is that they have shitty stereo and sound systems. An argument can be made, naturally, that people change them out, but the vast majority don't bother, and people pay the extra for Ford and Chrysler to get good sounding systems. It actually took me by surprise when I heard it, but the other guys are using it against them, and it seems to work.

Could be a lot more issues, but that's the main one I keep hearing.

10:47 PM  
Blogger Little Miss Chatterbox said...

I linked to you on my post today :-).

2:10 AM  
Blogger Gayle said...

The sound system of a vehicle doesn't mean a thing to me. (In referrence to Ab's comment.) I almost never listen to anything when I'm driving. I don't like any distractions.

I was going to tag you Shoprat, but I see you were recently tagged and so you have been spared because I'm feeling benevolent today. :)

11:43 AM  
Blogger shoprat said...

Thanks Gayle

11:47 AM  
Blogger The Game said...

They have to make cars people want to buy...lowering the price might help. I see a lot of smart people in these blogs that seem to be linked together...don't be afraid to stop by and say hi at mine...

4:14 PM  
Blogger Patty said...

Lowering the price might be helpful, however its a long road to fix the company.
I have to give them credits where its due they are a good Corp. citizen.
Tedneck Granny Rides Again

10:12 PM  
Blogger shoprat said...

the game
I took a look at your Right From the Right blog and I like it. I have included you in my links.

10:18 PM  
Blogger The Conservative UAW Guy said...

I hope the strategy works, as I have a vested interest in GM!

BTW, the stereo in my Chevy truck is a stock system and it sounds great.
In the past, they did kind of suck, though. But those days are gone (I hope).

11:20 PM  
Blogger shoprat said...

cug
While I do not work for GM, we do paint GM parts so I too have something of a vested interest in their survival.

10:48 AM  
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1:36 AM  

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