DETROIT – At the last minute, General Motors deflated the artificial balloon of good feeling generated by three days of products introductions at the North American International Auto Show.
With wacky concepts and plenty of ready-for-prime-time metal, the Detroit auto show is the nation’s most significant. This year’s event attracted 6,800 reporters and even the first Chinese automaker willing to test the American waters.
But, just as the press preview days were getting ready to end, GM executives brought everyone back to reality. They talked about prices.
They weren’t the only ones.
• The new Dodge Caliber, a wagonlike rival to the Pontiac Vibe and Toyota Matrix, will sell for $13,985, including destination charge. “I’ve spent more on my dates at Bennigan’s,” joked comic actor David Spade, who took part in the Caliber intro. It goes on sale soon, maybe before the end of the month.
• The new Mazda CX-7, one of the multitude of crossover utilities at the show, will start at $24,310 for the two-wheel-drive version. It goes on sale in the spring, and the price includes the destination charge.
• The new Jaguar XK coupe will sell for $75,500. The convertible XK will go for $81,500. I don’t know when it goes on sale, and I don’t know if the price includes the destination charge.
But GM trumped them all. It announced that it would make a major effort to end the incentives wars that it began in 2001 shortly after the Sept. 11 tragedy.
So, Tuesday, it cut the manufacturer’s suggested retail price (MSRP) on 56 of its 77 models, or for about 80 percent of its volume. Cuts range from a few hundred dollars to about $2,500. That meant reprinting 1 million vehicle window stickers.
GM Chairman Rick Wagoner, in a scrum of tape-recorder and TV-camera-wielding reporters, deflected a suggestion that this was a desperate move.
“We think this is going to call attention that you can buy another product, but if you do you’re paying more than you need to,” Wagoner said.
Mark LaNeve, GM’s vice president for North American vehicle sales, service and marketing, was animated as he discussed the plan with reporters.
Massive incentives, he said, are “just not a good way to run our business. This isn’t a promotional program. It’s a permanent repricing.”
GM gave some examples. A Chevy Cobalt coupe, a fairly new small car, used to sell for $14,490. It’s now sticker priced at $12,990, much less than rivals such as a Toyota Corolla CE, Honda Civic DX and Ford Focus ZX3.
Similar patterns emerge with the Chevy Silverado pickup, the Buick LaCrosse sedan, the Pontiac G6 and the GMC Envoy SLE sport utility.
LaNeve said the move wasn’t designed to boost GM’s market share, which hovers near 26 percent. And it’s not a moneymaking scheme, as the prices now being offered are about the same as what was available in the summer during GM’s successful “employee discount” program.
But, he said, it will bring some consistency to GM. Last year, for example, during employee discounting, the auto giant had a 32 percent market share. When the program ended, its share fell to 24 percent.
Of course, many unanswered questions remain. Will U.S. car buyers, who have become so used to incentives, resist buying new vehicles without them? And, if they do, will GM cave in to falling sales and offer them anew?
According to edmunds.com, incentives were $3,456 per domestic vehicle sold and $1,109 per Japanese vehicle sold in 2005. GM paid the most, at $3,623 a vehicle.
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