GM Reduces Prices on 80 Percent of Its U.S. Models (Update1)
GM Reduces Prices on 80 Percent of Its U.S. Models (Update1)
Jan. 10 (Bloomberg) -- General Motors Corp., whose U.S. sales fell 4.3 percent last year, said it will cut prices on about 80 percent of its cars and trucks.
Prices will reduced on all Buick, Chevrolet and GMC models and most Pontiac vehicles, said Mark LaNeve, GM's head of North American marketing, in a statement today. The price cuts take effect tomorrow. Combined with reductions made on some models in August, the changes cover 90 percent of GM's volume, LaNeve said.
GM Chief Executive Officer Rick Wagoner said two days ago that GM may improve U.S. sales this year on the strength of new vehicles such as its redesigned large sport-utility vehicles. GM, the world's largest automaker, lost $4.8 billion in North America last year. Its 26.2 percent U.S. market share in 2005 was the lowest in 80 years as Toyota Motor Corp. and other Asian automakers gained a record 36.5 percent share.
``It's a good idea, but it may not be big enough and it will probably take three to four months to gain traction because it's a slow time right now for sales,'' said Art Spinella, president of CNW Marketing, an auto consulting and research firm in Bandon, Oregon.
The program lowers prices an average of $1,300 and as much as $2,500, GM said. The Chevrolet Cobalt LS coupe's price was cut $2,000 to $12,990, while the Silverado pickup regular cab's price was cut to $16,990 from $19,265.
No price cuts will be made on 2006 large SUVs. The 2007 redesigned Chevrolet Tahoe SUV will be priced at $33,990 for a 5.3-liter V-8, $2,000 below the equivalent 2006 model.
LaNeve said last year's lower-price program, launched as GM also used employee discounts to sell vehicles, wasn't as successful as GM wanted and its message ``got lost'' among the ``big promotions.''
GM shares fell 4 cents to $22.37 at 11:30 a.m. in New York Stock Exchange composite trading.
To contact the reporter on this story: Barbara Powell in Southfield, Michigan, at bpowell4@bloomberg.net
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