Pontiac and Saturn Cars at Bargain Prices: Why Now

Armen Hareyan's picture

This is the end of the year and the U.S. carmakers are in their traditional year end push to sell the inventory. However, the case with Pontiac and the Saturn car is different. GM increases incentives for its salespeople to market the highest number of Pontiacs and Saturn cars with expiration dates. Currently those cars are at bargain prices.

Consider this, GM is paying its dealers and salespeople for the remaining Pontiac and Saturn cars. GM will pay this money to its dealers if those two brands move from the lots by January 4 of 2010. This is the last day of December computable.

The Wall Street Journal has calculate this rebate and writes that this new policy implementation may reduce the car price by 46 percent. To facilitate the sales, dealers can move their cars from car lots to the segment (renting) or added to its fleet of zero miles.

A quick look at a Pontiac Dealer website shows that those car prices range from $15,000 to 29,000. If the dealers cut their prices accordingly and don't be greedy the consumers may be able to get a Pontiac 2009 G3 for $8,000 dollars. What if the dealers themselves eve further sweetened the deals. In this case consumers may get a brand new car for less than $8,000 dollars.

Some Saturn car dealers already jumped on the offer and have filled the internet with ads offering special online pricing "to reach sales goals." This clearly refers to GM's incentive to Pontiac and Saturn car dealers.

On the other hand it seems that there are some Pontiac dealers that are clueless about GM's sweet year-end offer. While covering this story we contacted a local Pontiac dealership where the front line person did not have any idea what we were asking about. It could also be that the management was not successful in making quick decisions and preparing its sales people for public inquiries about this matter.

Why is GM doing this? The company hopes to improve the operating balance and accelerate the restructuring of the company. GM is closing some brands, letting go the others: namely Hummer and Saab, and staying with Chevrolet, Buick and GMC Cadillac.

These changes were announced last year.

The problem is the cost of closing Saturn and Pontiac car brands. In early December, dealers had in stock 14,500 new cars. This is equivalent to the total sales of two or three months of these brands, said sources with the dealer association. GM, thus hope to quickly reduce its inventory of these cars and move on with its restructuring.

Written by Armen Hareyan

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