GM Moves Away From Incentives, But Cuts Prices?

So General Motors (GM) is looking to reduce its reliance on consumer incentives to boost car sales. Sounds like a good idea to me. When you have offered employee discounts and zero percent financing for months on end, the buyer knows they have huge negotiating leverage when they walk into a dealership. Ideally, buyers would be willing to pay market prices for quality vehicles that they want.

The interesting part of this story is that GM is cutting prices by up to $2,500 per vehicle to make up for the reduced incentives in order to entice consumers. It seems like they are changing the name of the discounts, but still don’t have the product line to charge full price. Cutting incentives and reducing sticker prices simultaneously seems like a zero sum game to me.

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