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GM, Chrysler Hope Incentives Will Boost Sagging Sales

GM tries to retain customers abandoned by closed dealerships

By Truman Lewis
ConsumerAffairs.com

November 23, 2009

GM has started sending letters to nearly 1 million customers of dealerships that have been shut down or lost their franchise in the recent government-sponsored reorganization. The letters are offering discounts of $1,000 to $2,000 on most models of GM's four surviving brands.

Chrysler last week said it would offer cash incentives of $1,000 to $1,500 on many of its vehicles. The incentives -- timed to coincide with the Thanksgiving holiday break -- run through January 4.

Besides cash discounts, Chrysler is offering 0 percent financing for 60 months on many models, including the 300, 300C, Dodge Charger and Dodge nitro. Chrysler's sales were down 39 percent through he first 10 months of the year, the worst showing of any major automaker.

GM is just "trying to keep our current customers in the GM family by making it easy for them to get back into a dealership," a GM spokesperson told Automotive News. But some dealers are hopping mad, saying it's "inappropriate" for GM to launch the incentive program while it is still supposedly negotiating with the dumped dealers.

GM customers have 45 days -- until January 4, 2010 -- to take the letter and proof of their identity to a surviving GM dealer. The size of the discount each customer qualifies for will depend on the "relative distance to the nearest dealer," among other factors, a GM spokesperson said.

In the Washington, D.C., area, longtime Saturn dealer Burke O'malley sent coupon booklets to customers of his Saturn dealerships in Sterling and Fairfax, Va., offering discounts on new cars at Sterling Chevrolet, promising that his other dealerships had learned how to offer Saturn's low-pressure, no-haggle sales techniques.

Nearly 2,000 GM dealers have agreed -- though often reluctantly -- to shut down by October 2010.

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