DETROIT -- Costco has launched a deal with General Motors allowing its members to buy certain Chevrolet and GMC light trucks through select franchised dealers at a so-called "preferred price" -- generally equivalent to the price that the automaker offers its suppliers' employees.
Rick Borg, vice president of the Costco Auto Program, on Tuesday said the popular warehouse club expects its members to buy more than 5,000 new Chevrolet and GMC light trucks under the program. It started Tuesday and will end Jan. 3.
Costco also is giving a $500 Costco Cash Card to members who participate in the program.
GM spokesman Jim Cain described the Costco promotion as a "brand-awareness program" and a first for GM.
'Great showcase'
"Costco provides a great showcase. It has millions of members nationwide," he said. "This gives us the opportunity to put vehicles on display and reach people in a unique setting outside of a dealership."
GM's "preferred price" is a discount that varies by product, Cain said. It is similar to special prices that employees of GM suppliers are eligible to receive, for example. The deal is not as deep as an employee discount, Cain said.
Eligible vehicles include the new 2011 and 2012 Chevrolet Silverado, Suburban, Tahoe and Traverse and GMC Acadia, Sierra, Yukon and Yukon XL.
Costco members who take advantage of the program can combine the lower prices with other GM rebates and incentives for which they are eligible.
To participate, Costco members must register with the Costco Auto Program online or by calling a special telephone number. They also must complete redemption forms and surveys after making the purchase to receive the $500 Costco Cash Card incentive.
Tracking conquests
Costco's Borg says the warehouse club traditionally surveys its members about their car buying experiences and preferences and will share aggregate results with GM.
"We'll survey every member who makes a purchase," Borg says. "We'll ask them if they were planning to buy a GM vehicle. If they weren't, we ask what they were planning to buy so we can figure out the conquest sales. In past promotions, conquest sales have exceeded 50 percent."
Borg says Costco has conducted similar programs for its members since 2007, including one with Volvo in November and December 2010.
The Costco Auto Program started in 1989 and arranges no-haggle prices on new and certified used vehicles with individual dealerships on behalf of its members. In 2010, Costco members bought 250,000 vehicles from more than 2,400 dealerships through the program.
Costco, of Issaquah, Wash., has 432 warehouse stores in 41 states plus Puerto Rico. Members pay annual fees of $55 or $110 to shop for a range of products at or through the club at discount prices.
