Employee Pricing Superlatives Turn to Expletives

I feel like I’m beating a dead horse here, but it’s such an expensive dead horse that it deserves another post. Yes, GM and Ford announced sharp reductions in year-on-year September sales, canceling out gains from the Employee Pricing Programs (EPP) over the summer. I’d love to see the time-shifting cannibalization models that went into planning these promotions.

Large SUV sales– the backbone of profits for the domestic automakers for the past 10 years– were off over 30%. As the linked article mentions,

“Many of the superlatives that were used to talk about sales this past summer turned to expletives in September,” George Pipas, the top sales analyst for Ford Motor Co., said in a conference call with journalists.

How expensive is this dead horse? In addition to the discounts on the inventory sold under the discount programs, you now have the slowdown in future sales, which will probably cancel out the benefits of clearing out old inventory. And rather than lessening expectations of deep discounts, probably the most important pure-pricing task before the domestic automakers, the EPPs have increased discount dependency. I couldn’t tell you the exact numbers, but there is a dollar sign in front and 3 commas worth of digits.

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