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GM Cuts Prices

January 10, 2006

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General Motors is slashing sticker prices as much as $2,500 on Chevrolet, Buick and GMC products as well as many Pontiacs. The cuts will average $1,300.

The financially troubled automaker is pulling out the stops to hang on to disappearing market share. The auto giant also hopes to reduce future spending on consumer incentives and other sales promotions which have sometimes topped $4,000 per vehicle.

The price cuts begin January 11. At the same time, GM will make life more difficult for its dealers by reducing the dealer discount on some vehicles. That will mean a smaller gap between the dealer invoice price and the sticker price and could lead to smaller profits for new car dealers.

GM expects the price cuts to make money for the company in increased sales because of new GM products about to go on sale.

The company hopes the new pricing will make it easier for consumers to compare GM vehicles with their competitors on the Internet, where almost two-thirds of the car consuming public searches for a new car or truck.

High incentives complicate Internet research and make comparison shopping difficult.

Here are some examples of the new GM pricing:

• A 2007 Chevrolet Tahoe will have an MSRP of $33,990 for a model with a 5.8-liter, V-8 engine. That is $2,000 below the 2006 Chevrolet Tahoe even though the new Tahoe offers better fuel economy.

• The base price for the 2006 Cobalt LS coupe will be $12,990 including shipping charges. That is $1,500 less than the current base price of $14,490.

• A Silverado regular cab pickup will cost $16,990, down $2,275 from the current base price. The Crew cab version of that truck will sell for to $25,490, $2,500 less than the current base price.

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