Will GM's New Buyer Incentives Help Sales?

(CBS)  As General Motors tries to pull an emergency U-turn, the new man in the driver's seat, CEO Fritz Henderson, admitted Tuesday that the company is facing a crisis with consumers.

"It's about confidence. It's about credit. And it's about employment," Henderson said.

So GM unveiled a new package of buyer incentives, reports CBS News correspondent Anthony Mason. The automaker, like Ford and Hyundai, will now offer to make car payments for buyers who are laid off from their jobs. GM also promises to guarantee the trade-in value of its vehicles, when buyers purchase another GM car or truck.

"Certainly our view is we need to bring customers back into the equation," Henderson said.

Because across the industry, sales have been in freefall. In 2005, nearly 17 million vehicles were sold in the United States. This year the industry's on course to sell just 9 million. Can it survive at this rate?

"Survive, maybe. Prosper, no," said industry analyst Brian Johnson.

Johnson said the industry's old sales tricks, like zero percent financing and rebates simply aren't working anymore.

"They've really lost the ability to kind of wake up the consumer and say it's time to go in the showroom," Johnson said.

So President Barack Obama is promoting a new federal tax break.

"If you buy a car anytime this year, you may be able to deduct the cost of sales and excise taxes," he said.

Mr. Obama's backing a proposal that would give cash to buyers who trade in their old, gas-guzzling clunkers for new fuel-efficient cars. A similar program in Germany has boosted sales there by more than 20 percent.

"This would really help us out because we're really hurting," said a car dealer in Los Angeles.

GM wouldn't say what it's new incentives will cost the company. But even the most radical cost-cutting measures can't save GM if customers don't start buying cars again.

[mars7578]

gm is just like a lot companies in the new world economy.the new model for companies including banks is to keep as litlle reserve as possible and turn every asset to value so that it can be wagered on wallstreet. not realiziing the consequences of all this betting until it was too late,gm has been losing and living off loans and hype for years.gm needs some non attached group to come in and lay out a good plan for the company as a whole.i dont see how the company groups such as stockholders or union can do this. the best they can do without bankruptcy is agree to be bound to the plan developed by a professional company.

[roach9703]

GM needs a product line pruning. Keep the brands like Buick, but kill the losers.
Another possibility is to put each product line up for bid; generate the cash and rebuild a much smaller company. Smaller auto companies selling a few products lines is possible with the new technology we have today.
The sales presentation yesterday did not seem very convincing.

[nolies74621]

Well, if you have never owned a Ford than you are not an authority on their products. That saying is nothing more than a playful joke between Chevy and Ford enthusiasts. Perhaps you should try supporting the "home team" and buy American, assuming you don't
Posted by djberson at 8:30 AM : Apr 1, 2009


I have never owned a Ford but I have driven them both as rentals and as a work vrhicle. Fords are cheap, the interiorsare cheap, the engines wear out quickly. I Love my VW Passat tTurbo with 280 horse power which I have it here in Germany with me. I got it up to 155 MPH on the autobahn. If I can't have a VW give me a MOPAR any day over a FORD. Msutangs GT are the only decent Ford products but they can't hang on the autobahn, they were'nt built for it. I smoked quite a few of them in my Turbo powered Passat T.

[sjc_1]

I have always bought American cars and I have no regrets. I figure what goes around comes around. If I want to see American workers have a decent standard of living, I will support them in value added manufacturing. You earn more turning iron into cars than turning hamburgers at a fast food place.

[citizen123]

I've never bought any vehicle, except Chrysler and GM. Thanks to Obama's buffoonery I'll never buy another one regardless of price.

[citizen123]

I've never bought any vehicle, except Chrysler and GM. Thanks to Obama's buffoonery I'll never buy another one.

[djberson]

JD Power and Associates rates BUICK the number one brand for long-term reliability, ahead of ALL others. ALL of them. Lexus and Toyota is high on the list too, but not as high as Buick. Honda has lower reliability ratings that THREE US BRANDS, Buick, Mercury and Cadillac. I am not making this up, Google it!

[djberson]

" I drive a BMW 535i I bought new in 1992. Still runs and looks great. Why would I buy anything else?"

Because what does that prove? I drive a ten year old American car that I bought used and still runs and looks great. It has as much power and more luxury features than most brand new BMW's do. It is an extremely reliable vehicle and fun to drive. I also drive a 40 year old American car that I also bought used that looks and runs great.
You could try being patriotic, and support the industry of your country, and keep the prosperity here.

[djberson]

"Ford stands for Fix or Reapair Daily .....or Found On Roadside Dead. I have never owned a Ford."

Well, if you have never owned a Ford than you are not an authority on their products. That saying is nothing more than a playful joke between Chevy and Ford enthusiasts. Perhaps you should try supporting the "home team" and buy American, assuming you don't

[1Jolat]

If you plan on taking advantage of this program, make sure that before you go car shopping you visit www.kardawg.com. They're not selling anything, It's free information.