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GM Launches 'Red Tag' Incentive Program for Cars and Light Trucks Through Jan. 3

DETROIT November 14, 2005; David N. Goodman writing fotr the AP reported that hoping to boost sales, General Motors Corp. on Monday announced a new incentives program of "Red Tag" prices on cars and light trucks through Jan. 3.

The announcement comes at a time when GM has been suffering billion-dollar losses and a declining North American market share. The incentives run through Jan. 3.

Under the program, dealers will post fixed maximum prices on most models of 2005-2006 Buick, Chevrolet, GMC and Pontiac nameplates, knocking up to $3,000 or more from the list price, GM said in a news release.

GM said the prices will be consistent across the country, excluding taxes, title costs and dealer fees.

The move will likely trigger a new round of price cuts across the car industry, even by Asian producers that have been gaining market share at the expense of the U.S. Big Three, said analyst Noriaki Hirakata of Morgan Stanley in Tokyo.

"Japanese -- they hate incentives, but they will have to respond," Hirakata said. "Generally, the selling price of light trucks will be under pressure."

The company said its round of incentives combines features of its recent "GM Employee Discount for Everyone" program and last December's Red Tag program.

GM says its North American division continues to suffer from high health care costs and falling sales of sport utility vehicles. The automaker's North American market share was down to 25.6 percent in the third quarter, from 28.5 percent a year ago.

The automaker said it was launching a nationwide advertising campaign on network television, on radio, in print and in other media to promote the incentives.

The company announced separate incentives for its Cadillac, Saturn, Saab and Hummer nameplates. It said Cadillac, Saturn and Saab will offer $500 rebates, while Hummer will have special pricing for a rear entertainment system.

On 2006 models, GM said the tag price for its GMC Envoy two-wheel drive SLE 3SA sport utility vehicle would be $4,442 below its previous sticker price.

Among cars, the tag price of the Buick LaCrosse CX would drop $3,019, while and the price of the base-model Pontiac Vibe would fall $692.