Tuesday, March 17, 2009

US Automakers Still Clueless

GM to cut prices to lure back US buyers

I read the headline and I had such hope. After years of inferior products at high prices the automakers are getting it: raise your quality to the standard set by the Japanese makers and simplify your pricing. But no, these price cuts are in the form of "discounts and other promotions."

Ever since I had awareness of cars and car prices, the US makers have been pushing rebates and similar discounts; "Employee pricing" has also been a popular one in recent years. I think these are an antiquated way of tricking people into thinking they are getting a deal--as are many sales and discounts. "Hey look, they're giving me $10K off, what a deal! I HAVE TO BUY IT NOW!!!" Consumers today are much more informed thanks to websites that allow for car comparisons, resale value history, etc. etc.. A customer these days can easily use all the information out there to see what price a car is worth, not what the sticker price claims it to be. Really, we should feel insulted by these tactics.

The better way, by far, would simply to offer lower prices. There would be a small segment of people that would miss the haggling and (falsely) thinking they pulled one over on the dealer. However, everyone else would enjoy the simpler process, especially those not interested in messing with car salesmen to get a "deal" on a car that should be priced that way to begin with. It is obvious you need to try something new Detroit, you've been failing for a while now. Take some ideas that other industries and companies have come up with: simplify your line, offer quality products, and make it easy for the customer to buy your products.

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