the discount really works
07-20-2005, 07:44 AM
#21
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I saw an ad for this last night and it made me laugh. They showed a car (Malibu I think) that was normally $18,500 and is now priced at $14,000. I didn't laugh because its $4,500 less and I still wouldn't buy it, I laughed because no one questions why GM makes $4,500 profit on a car.
07-20-2005, 08:24 AM
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Originally Posted by ninethreeeleven,Jul 20 2005, 07:44 AM
I saw an ad for this last night and it made me laugh. They showed a car (Malibu I think) that was normally $18,500 and is now priced at $14,000. I didn't laugh because its $4,500 less and I still wouldn't buy it, I laughed because no one questions why GM makes $4,500 profit on a car.
07-20-2005, 08:33 AM
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Selling a car at "employee" discount is really not that diffferent then going in there and bargaining your ass off.
Do you think they are loosing money when you go in and bargain.
There is a lot more profit on a car than you guys think. GM owns most of the companies that make the scews, bolts, plastics, etc. that are supplied for the car.
With that logic you would think that McDonald's is loosing money doing those $0.99 McFish or whatever it's called.
I am in the fragrance business and if you guys knew what the mark up was on perfume, you would be amazed.
As far as resale value goes, what car company is not always introducing new and improved products every year. You buy a labtop and it's not even worth half of what you paid for it.
Do you think they are loosing money when you go in and bargain.
There is a lot more profit on a car than you guys think. GM owns most of the companies that make the scews, bolts, plastics, etc. that are supplied for the car.
With that logic you would think that McDonald's is loosing money doing those $0.99 McFish or whatever it's called.
I am in the fragrance business and if you guys knew what the mark up was on perfume, you would be amazed.
As far as resale value goes, what car company is not always introducing new and improved products every year. You buy a labtop and it's not even worth half of what you paid for it.
07-20-2005, 08:48 AM
#24
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Originally Posted by blastr17,Jul 20 2005, 07:23 AM
Every time GM sells a car with the employee discount they are still making money, just less of it then if they sold it for its regular price.. you think they are selling these cars at a loss...a 60k escalade costs maybe 200$ more to make then the base Yukon which is list what 45K so if they sell the escalade for 50K they still make money...Gm has been raping the country for years with old technoloogy dressed up in new clothes...it cost them dick to make these cars, if they actually priced them right they would sell...exactly why these heavy, heavy "discounts" work
they are not making a profit with this disount. they are merely clearing out all the crap that they couldn't sell before. Honestly, I think this discount promotion is stealing GM sales from future months (one plans december purchase, but does it in June for the "deal").
07-20-2005, 08:50 AM
#25
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Originally Posted by OCMusicJunkie,Jul 20 2005, 07:31 AM
I don't know if the average consumer is smart enough to realize GM screwed their resale value. Those who do realize this are probably the ones already in imports. 
yep, your right...not smart enough at all!
07-20-2005, 09:06 AM
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[QUOTE=steven975,Jul 20 2005, 08:48 AM] the north american operations lost $1 billion dollars TWO QUARTERS IN A ROW NOW.
they are not making a profit with this disount.
they are not making a profit with this disount.
07-20-2005, 12:08 PM
#27
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how the heck do you explain a $2 billion loss in the last HALF year then?
True, they don't sell EVERY car at a loss, but it seems the lions share are losing money. An escalade may be making them some scratch, but cars like the Malibu, Grand Prix, and GTO are probably selling at a loss.
When you say "it costs GM dick to build a car these days" are you factoring in the insane UAW labor costs and health care or JUST materials.
"it costs GM dick to build a car these days" and a $4,000,000,000 annualized loss do not go hand in hand.
Yes, they made money selling at close to MSRP. They have not been able to do that since they started their little incentives war with 0%...which by the way costs them probably $6250 (that is the opportunity cost) over 60 months on the average car in lost revenue.
But GMAC makes money you say? Yea, that's because that $6250 is PAID to GMAC by the FACTORY. GMAC would lose $ hand over fist if that were not the case. They have to get about 5% a year on average for what they lend out to cover opportunity costs on what they lend and staffing.
The low interest (even 2.9% interest costs $2625 in factory-lender incentives) ALONG with the heavy discounts is costing GM dearly. With $1B in losses how exactly ARE they making profit selling these cars?
True, they don't sell EVERY car at a loss, but it seems the lions share are losing money. An escalade may be making them some scratch, but cars like the Malibu, Grand Prix, and GTO are probably selling at a loss.
When you say "it costs GM dick to build a car these days" are you factoring in the insane UAW labor costs and health care or JUST materials.
"it costs GM dick to build a car these days" and a $4,000,000,000 annualized loss do not go hand in hand.
Yes, they made money selling at close to MSRP. They have not been able to do that since they started their little incentives war with 0%...which by the way costs them probably $6250 (that is the opportunity cost) over 60 months on the average car in lost revenue.
But GMAC makes money you say? Yea, that's because that $6250 is PAID to GMAC by the FACTORY. GMAC would lose $ hand over fist if that were not the case. They have to get about 5% a year on average for what they lend out to cover opportunity costs on what they lend and staffing.
The low interest (even 2.9% interest costs $2625 in factory-lender incentives) ALONG with the heavy discounts is costing GM dearly. With $1B in losses how exactly ARE they making profit selling these cars?
07-20-2005, 12:25 PM
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Originally Posted by ninethreeeleven,Jul 20 2005, 07:44 AM
I saw an ad for this last night and it made me laugh. They showed a car (Malibu I think) that was normally $18,500 and is now priced at $14,000. I didn't laugh because its $4,500 less and I still wouldn't buy it, I laughed because no one questions why GM makes $4,500 profit on a car.
GM's plan is to reduce prices on all existing models (new models like the C6 are supposedly already priced correctly) in order to get MSRP closer to the average transaction price. That way GM products can compete more effectively in internet and newspaper comparisons.
07-20-2005, 01:06 PM
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Originally Posted by steven975,Jul 20 2005, 08:08 PM
how the heck do you explain a $2 billion loss in the last HALF year then?
True, they don't sell EVERY car at a loss, but it seems the lions share are losing money. An escalade may be making them some scratch, but cars like the Malibu, Grand Prix, and GTO are probably selling at a loss.
When you say "it costs GM dick to build a car these days" are you factoring in the insane UAW labor costs and health care or JUST materials.
"it costs GM dick to build a car these days" and a $4,000,000,000 annualized loss do not go hand in hand.
Yes, they made money selling at close to MSRP. They have not been able to do that since they started their little incentives war with 0%...which by the way costs them probably $6250 (that is the opportunity cost) over 60 months on the average car in lost revenue.
But GMAC makes money you say? Yea, that's because that $6250 is PAID to GMAC by the FACTORY. GMAC would lose $ hand over fist if that were not the case. They have to get about 5% a year on average for what they lend out to cover opportunity costs on what they lend and staffing.
The low interest (even 2.9% interest costs $2625 in factory-lender incentives) ALONG with the heavy discounts is costing GM dearly. With $1B in losses how exactly ARE they making profit selling these cars?
True, they don't sell EVERY car at a loss, but it seems the lions share are losing money. An escalade may be making them some scratch, but cars like the Malibu, Grand Prix, and GTO are probably selling at a loss.
When you say "it costs GM dick to build a car these days" are you factoring in the insane UAW labor costs and health care or JUST materials.
"it costs GM dick to build a car these days" and a $4,000,000,000 annualized loss do not go hand in hand.
Yes, they made money selling at close to MSRP. They have not been able to do that since they started their little incentives war with 0%...which by the way costs them probably $6250 (that is the opportunity cost) over 60 months on the average car in lost revenue.
But GMAC makes money you say? Yea, that's because that $6250 is PAID to GMAC by the FACTORY. GMAC would lose $ hand over fist if that were not the case. They have to get about 5% a year on average for what they lend out to cover opportunity costs on what they lend and staffing.
The low interest (even 2.9% interest costs $2625 in factory-lender incentives) ALONG with the heavy discounts is costing GM dearly. With $1B in losses how exactly ARE they making profit selling these cars?
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