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GM starts Red Tag sales early

Two new direct mail campaigns also launched

UPDATED: 11/3/08 3:13 pm EST DETROIT -- General Motors said Monday it is starting its annual Red Tag sale early this year. The sale, which typically begins just before Thanksgiving weekend, will start tomorrow and run until Jan. 5.

GM also has launched a pair of direct-mail incentives programs, dealers said.

In a sales call to analysts and the media, GM marketing chief, Mark LaNeve confirmed GM would be starting the Red Tag sale Nov. 4.

"To get things going we’re going to move up our traditional Red Tag sale," says LaNeve, GM's vice president of vehicle sales, service and marketing. "We typically start it Thanksgiving weekend, we’re going to start it tomorrow. It’ll be a net price play much like Employee Discount. We’re going to have a very aggressive ad campaign a across all of our divisions."

LaNeve says GM will be more aggressive overall in its marketing. “We’re going to attack the market with as much media weight as we can throw against it,” he adds.

Dealers said that in previous years the dealer council had requested moving the sale up to the first week of November to be on par with competitors’ programs.

“It’s a stronger play than what they had last month,” said Lynn Thompson, president of Thompson Motor Sales in Springfield, Mo. “They want to make sure they are out there and competitive from day one.”

The sale will encompass all GM brands, including Saab, but exclude some GM products, such as the Cadillac CTS-V, dealers say. The Red Tag sale means customers will get almost the GM supplier price on most GM products, including some hot-selling products such as the Buick Enclave.

Rebates on top of sale price

The supplier price is 4 percent more than the employee price. That means a new Buick Enclave -- usually priced at $36,530 including shipping -- would be priced at $34,608 less an applicable incentive, says one Buick-GMC dealer.

And there will be rebates on top of the supplier price up to $8,500 (including dealer cash) on select 2008 and 2009 models, the dealer said.

GM is offering up to $7,250 in customer cash under the plan, GM said.

One example, the GMC 2008 Yukon XL now has $8,500 on it, says one dealer.

One other good deal is the Cadillac Escalade, Thompson says. That vehicle is part of the Red Tag sale at the supplier price, plus there is $6,750 cash on the hood and some dealer cash on top of that discount.

“This is really the first time that Cadillac, Hummer and Saab went in on this with Buick-Pontiac-GMC and Chevrolet on the Red Tag event,” Thompson says. “So this is big.”

As part of the sale, GM will offer a lease pull ahead of up to two monthly payments for those who are in a lease that expires if your lease expires between Nov. 4 and June 30, 2009.

Direct-mail incentives launched

GM is also launching two new incentives on most models, but they are targeted at select customers.

In a program dubbed “Garage Mate,” GM is mailing an unspecificed number of $2,000-off coupons for “most” 2008 and 2009 models, according to a memo to dealers obtained by Automotive News. Those coupons will go to customers who own at least one GM vehicle and a competitive vehicle that is “modeled to be in-market for repurchase,” the memo said.

The second incentive plan also is a direct mailing. GM will offer $1,500 direct-mail cash on most 2008 and 2009 models to a select list of non-GMAC loan holders who do not own a GM vehicle.

Both direct-mail programs are planned to run through Jan. 5, the memo said.

GM spokesman Johnn McDonald had no comment on the two direct-mail incentive offerings, saying: “It’s a private direct-mail piece only available to people who receive it.”

FACT SHEET: GM's 2008 Red Tag sales

“The Price On The Tag Is The Price You Pay”

GM is launching its Red Tag Event, where participating dealers will use red tags on vehicles to advertise their prices so customers can see at a glance the price they’ll pay (including all cash back incentives) on the exciting lineup of new GM vehicles. The Red Tag Event runs from Tuesday, November 4, 2008 through Monday, January 5, 2009. Here are the details:

• The Red Tag Event provides special pricing and Customer Cash from $0 up to $7,250 to customers purchasing an eligible new 2008 or 2009MY vehicle, while supplies last. (Excludes Cadillac CTS-V series, Chevrolet Corvette ZR-1 and Medium-Duty trucks) See examples below.

• Dealers are instructed to write a price on the Red Tag, and to make it the price the customer will pay. This makes it simple for consumers to find great year-end deals on an outstanding GM vehicle. Dealers have been asked to be sure that the price on the Red Tag includes all applicable incentives and other fees, and excludes only tax, title and registration fees.

• While GM will create special pricing on each eligible vehicle, dealers will also use factory-to-dealer incentives and their own price reductions to create even lower prices on many vehicles in inventory for the Red Tag Event. Dealers will place Red Tags on the specially-priced units.

• All GM divisions are participating in the Red Tag Event. The limited-time offer runs Tuesday, November 4, 2008 through Monday, January 5, 2009.

• 2008 and 2009 Chevrolet, Buick, Pontiac, Cadillac, HUMMER and GMC Truck models also include a 100,000 mile/5-year Powertrain limited warranty, which is fully transferable and has no deductible. When you add in roadside assistance and courtesy transportation, it’s the best coverage in America. This also is a great opportunity for customers to discover the outstanding value, exclusive features and fuel economy of some of our most popular cars and trucks.

Note: Customers should visit their neighborhood GM dealer for complete details and offer restrictions. For more information about GM’s current offers, visit:

http://www.gm.com/vehicles/currentoffers/

Red Tag Event Examples (tax, title and license fees are extra):

2008 GMC Yukon Denali AWD $56,315 MSRP

Red Tag Price $51,830

Cash Back Offers -$5,000

Red Tag Price after cash back $46,830 or less

($9,485 value compared to MSRP)

2008 Chevy Silverado 1500 4WD $29,480 MSRP

Red Tag Price $27,397

Cash Back Offers -$5,500

Red Tag Price after cash back $21,897 or less

($7,583 value compared to MSRP)

2008 Buick Lucerne $31,880 MSRP

Red Tag Price $30,446

Cash Back Offers -$3,750

Red Tag Price after cash back $26,696 or less

($5,184 value compared to MSRP)

2009 Saturn Vue XE $23,745 MSRP

Red Tag Price $22,675

Cash Back Offers -$1,000

Red Tag Price after cash back $21,675 or less

($2,070 value compared to MSRP)

You can reach Jamie LaReau at jlareau@crain.com

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