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GM should stick with regional incentives

Julie Cantwell covers marketing for Automotive News

General Motors could be making a big mistake by backing off of regional incentives.

Though continuing one simple, nationwide incentive sounds good, it isn't practical.

Nothing will be as sweet as 0 percent financing, which GM plans to end Jan. 2. And dealers need to get back to pushing the products that make sense in their area, in their weather.

GM will be hard-pressed to come up with another nationwide incentive to suit all its dealers and customers. Yes, 0 percent broke through the clutter and raked in sales. But the blanket approach also worked because of its relevance to the state of the nation, economically and emotionally. If GM pushes a national incentive of cash, for example, that won't help dealers as much in the Northeast and West, where leasing rules.

The company will ask, not require, dealers to promote national incentives through their local area marketing groups. After a two-year hiatus, GM brought back the groups in February. Dealers' bitterness and distrust of GM boiled in that time, so the company can't afford to upset dealers now.

Tommy Brasher, Chevrolet dealer council chairman, said GM and dealers can hope for simplicity, but it's not realistic. "We've got to have not only simple, but effective," he said.

Brasher, who also owns a Buick dealership, said one incentive program for Buick could work because "the demographics of a Buick buyer is they like cash and not rates," but that wouldn't work for Chevrolet. The simplest that Chevrolet could go, he said, would be one incentive for cars, such as low-rate financing, and another for trucks, preferably cash.

GM has been in the driver's seat on incentives. The Chrysler group, Ford Motor Co. and Toyota Division were forced to jump onto the 0 percent bandwagon to be competitive.

But those competitors say they are listening to their dealers, and none of them plan to follow GM's footsteps on this one.

You can reach Staff Reporter Julie Cantwell at (313) 446-0374

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