NEW YORK — General Motors Co. is offering deep discounts on its remaining Saturn and Pontiac vehicles as it looks to move the leftover inventory of the soon-to-be-dead brands, according to a published report.
The automaker will pay dealers $7,000 for every new Saturn or Pontiac left on their lot if the vehicle is moved to dealer-operated rental or service fleets, according to The Wall Street Journal, which cited a letter mailed to dealers. This allows the dealers to sell the cars and trucks to consumers at a discount, although the vehicles would be labeled as used because the dealer would technically be the first owner.
The offer expires Jan. 4, according to the newspaper. GM spokesman Tom Henderson confirmed the details of the incentive plan Tuesday.
“That was the purpose of the programs - to help dealers reduce those inventories,” he said.
The decision to discount Saturns and Pontiacs comes as GM closes down both brands under the Detroit automaker’s restructuring plan. The shutdown of Pontiac was announced earlier in the year. GM announced this fall it would discontinue Saturn after a deal collapsed to sell the brand to Penske Automotive Group Inc.
Besides Pontiac and Saturn, GM is selling Hummer to a Chinese heavy equipment maker and is likely shuttering Swedish brand Saab. That will leave the automaker with four core brands: Buick, Chevrolet, GMC and Cadillac.
Sales of Saturn and Pontiac have declined sharply this year. Saturn sales have dropped 61.5 percent through November, according to Autodata Corp. Pontiac sales have slid 32.3 percent. GM’s companywide decline is 31.8 percent.
With a $7,000 discount, the manufacturer’s suggested price of Pontiac’s cheapest vehicle, the G3 hatchback, falls to $7,335. The incentive brings Saturn’s cheapest vehicle, the Astra compact car, to $9,495. Henderson, however, cautioned that the final price of the vehicles might be different.
GM’s typically offers discounts that are much smaller. According to the auto research Web site Edmunds.com, GM’s incentive spending in November totaled $4,270 per vehicle, on average.
GM had 8,700 Pontiacs and 5,800 Saturns in inventory at the start of December, Ward’s Auto Infobank data show. GM sold 7,426 Pontiacs and 3,737 Saturns last month, according to Autodata Corp.
“When GM killed Oldsmobile, it took three years; this is basically killing brands on steroids,” said Rebecca Lindland, an analyst at IHS Global Insight in Lexington, Mass. “I don’t know why a dealer wouldn’t take this deal.”
Russ Shelton, a Buick, GMC and Pontiac dealer in Rochester Hills, Mich., said he’s trying to sell all his Pontiacs to consumers by this weekend. On Jan. 4, which is counted as the last selling day of December, he plans to take the $7,000 to move any remaining vehiclesto the dealer fleet.
“There certainly won’t be many left after this,” Shelton said.
Information for this article was contributed by The Associated Press and by Katie Merx of Bloomberg News.
Business, Pages 29 on 12/30/2009