GM says that it will raise prices on some of its models due to rising costs. Somehow the reason does not seem to ring true. Although component parts, like plastic, are more expensive, GM is a company that is taking $9 billion a year out of its costs in North America. It would seem that a little increase in plastic would be offset by such a large number.But, perhaps GM can have its little fiction. It pricing problems are much worse.According to a study released today by Edmund’s, the online car buying company, a smart shopper can get up to 30% off the price of a pick-up or SUV now. Just as one example, the GMC Sierra is availabe at 23% below its sticker price. Since Ford and Toyota are also offering discounts on their SUV and pick-up trucks, the market is going to be even more competitive.Some industries do not give the consumer any chance to negotiate price. Gasoline sales are a good example. But, other industries, including cars, are built around a sales experience where the customer can bargain for a better deal.Raise the price 1% and then lower 25% when the customer shows up.Nice marketing technique.Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
GM Fakes A Price Hike (GM)(TM)(F)
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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