General Motors Co. is offering its dealers hefty incentives to move thousands of leftover vehicles from its discontinued Saturn and Pontiac brands. The unusual tactic could inflate the car maker's December sales and cut the cost to car buyers by as much as 46% off the sticker price.
In what is equivalent to a year-end fire sale, GM sent letters to dealers Dec. 23 saying it would pay them $7,000 for every new Saturn or Pontiac on their lot that is moved to rental-vehicle or service-vehicle fleets operated by the dealers. Dealers can then sell the vehicles at a more attractive price, though they must be described to customers as used because the dealers technically will be the vehicles' first owner.
The offer expires Jan. 4, the last day of the December car-sales month. GM will book the sales to dealers as fleet deliveries.
GM's move could speed the company's restructuring. Pontiac and Saturn, along with Hummer and Saab, were deleted from GM's lineup under its government-backed bankruptcy reorganization this summer. GM's remaining U.S. brands are Chevrolet, Buick, Cadillac and GMC.
The expense of the new program will add to GM's considerable cost of closing Saturn and Pontiac, a figure GM hasn't disclosed. GM spokesman Tom Henderson declined to comment on the financial impact of the new dealer incentives.
At the beginning of December GM dealers had 14,500 new Pontiacs and Saturns on their lots, which typically represents about two to three months of inventory depending on the model, according to Ward's Auto Reports.
Edmunds, another car-data service, estimates that GM will sell about 6,800 Pontiacs and 3,500 Saturns in December. That means dealers could have some 4,200 of the cars left.