GM Employee Discounts
Recent vehicle sales received a stir from auto-manufacturers after having issued employee discount rates for regular buyers. Numerous marketing advertisements have displayed that costumers can buy vehicles for prices equal to the employee rates leading to double the sales from non-GM buyers and greater buyer interest in general. The effectiveness of their ad’s also improved from 21% to 30%. All of these incentives have lead to higher sales; however, prices which have not seen heavy increases since 1995 are now likely to creep upward. The industry which has held back on major price increases will likely raise prices to help restore income to the manufactures.
Has this Ad campaign really helped auto-manufactures or hurt them? Do you think that prices will rise or should they be left the same? What good has the current pricing done for the industry? What Harm?
2 comments:
This Ad has helped the GM industry for the time being. If the prices were to rise you would expect a decrease in sales, which would end up putting GM at square one. The large increase in profit would balance out with the rise in price and would cancel each other out. If the prices were left the same I think that GM would have an opportunity to bring in some serious profit, but I would than wonder how much money would be lost by GM if this discount were to continue. The discount could be a good thing or it could be a bad thing. The only real way to tell is to see what the profit is like leaving the prices how they are right now, and then month’s later see what profit would be like if the price was raised gradually.
The employee discount did help the GM dealer ship. GM has been experiencing low income. This employee discount saved their sales and boosted income for the time being. When prices go up, I think GM will be able to keep selling.
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