According to Carty (2005), General Motors tried to alter prices to match the consumer’s needs. The price has a close relationship with the consumer’s willingness to pay.
In the last decades pricing was crucial for motor industry due to the wide range of carmakers and advanced technology. The advanced technology affect market trends and drive the prices to the lower range with offering better quality and performance.
After October 2001, General Motors offered rebates and zero-percent financing along with some employee discounts.
The majority of customers (close to 70%) use internet to find a new car or create their own car wish list, and only 15% of that customers are clicking future to find out rebates and more details. Therefore, if the price tag is listed in third party’s website, the risk of losing that customer is high.
“GM is lowering or keeping flat the base price of 30 models. GM said the cuts will be $3,190, for example, on Chevrolet SSR and $645 on Pontiac G6. Ford is cutting or maintaining prices on 16 models, including the Expedition, down $795, and F-150, down $1,685.” (Carty, 2005)
Kelly Blue Book said that seventy two percent of buyers are looking into rebated to make their decisions whether to purchase a new car or not.
Consumers are "well trained to look for deals, and I think it's going to be an uphill battle to try to wean them off of this," says Jack Nerad, editorial director for Kelley Blue Book.
Carty, Sharon S. (2005, 8, 1). GM, Ford try to alter pricing strategy. USA Today, Retrieved 1 10, 2009, from http://www.usatoday.com/money/autos/2005-08-01-gm-pricing_x.htm