GM Offers Unusual Incentives - Analyst Blog

General Motors (GM) plans to make a payment of $7,000 to auto dealers for each Saturn and Pontiac brand car they can move off their lots. The dealers would technically have to become the first owner of the cars in order to get the incentive. Afterwards, they would be able to pass on the incentives by selling the cars as “used vehicles" to customers at a steep discount. The deal would expire on Jan 4, 2010.
 
GM made this unusual incentive plan for dealers instead of customers, as it no longer wants to linger for e buyers. The automaker plans to clear the inventory as soon as possible as it looks forward to wind down the brands by 2010.
 
Pontiac was introduced by GM in 1926 and was sold in the U.S. , Canada and Mexico . Saturn was officially launched in 1990. The brands’ sales dropped last year as the auto market dried up.
 
As part of its restructuring efforts during the bankruptcy process in June, GM has revealed its plan to get rid of the unprofitable brands including Saab, Saturn, Pontiac and Hummer. The automaker scaled its products down to four core brands: Chevrolet, Cadillac, Buick and GMC.
 
Among the four brands, a tentative sale agreement of Hummer to a Chinese construction machinery maker has been reached. However, the automaker has till date not been able to shed the other three brands.Zacks Investment Research