I understand what GM, Ford, Dodge and local dealers now are doing with the employee discounts on vehicles. According to the WSJ on Monday, sales are up 41%, which I’m sure is exactly what they wanted. This reminds me of the time Chevy Chase put bubble gum on the Hoover Dam to block some of those holes that were leaking water in the movie Vegas Vacation. It worked for about 3 seconds.
The Chrysler companies are showing tables on their website to illustrate how much consumers are saving with the discount program. For instance on the Crossfire, it’s about $8,000. What happens when this employee discount madness halts?
The American people are going to demand those previous prices because they know how much they’ve been overcharged all these years. The winner in transactions is usually the one with more information. Well, now your customer has all the ‘real’ pricing information, so what will they do? The only thing I can think of is offer eternal employee pricing. Problem is that eventually it will no longer be employee only pricing because it will be the norm.
The price is not the American automakers problem. It’s only a short term solution. They need to focus on what people want in their cars. Chrysler is doing the best job it amongst all the American automakers especially with the Hemi. That thing costs them about $200 more to make and they make about $3000 profit per vehicle. GM is doing well with their Caddys. Chevrolet had a great brand initiative with their "Revolution." Ford is doing with their new Mustangs. Focus on what your markets want though. The outsides of these cars look great and better each year. They offer DVD players, satellite radio (XM and Sirius) and navigation systems. The point is: who doesn’t? It’s about how you offer them. Have you seen the interior design of a Honda versus a Chevrolet. The design and style are way outdated. The average consumer is not going to spend money to tear up and rebuild their insides with Xzibit. They want seamless technology in their vehicles.
In a year, if I have $30K to spend on a car, then I’d probably spend it on an VW Jetta over the Dodge Charger (non-hemi model). Because of a great branding initiative on Dodge’s part, the hemi would make me consider spending the extra dough for what’s inside and under the hood. I love the hard wiring for audio with the VW. All the German manufacturer’s are really doing a great job of this. Japan is lacking. No evidence, but I’m sure they have deals with the Japanese audio makers that discourages them from getting up to speed. I love the interior design of the Infiniti G35s. It’s very beautiful with lots of options. Have you seen the thousands of variations of Mini’s Cooper? Wow. Beauty may be in the eye of the beholder, but I prefer brains and beauty.
