The Fall of Incentives?
Yesterday, Rick Wagoner, the CEO of General Motors, gave his evaluation of the carmaker’s new “employee discount” incentive program, which the company began last week: “It is very early days, but I would say one or two days out of the box the reaction is excellent, but we have to see.”
What he really seemed to be telling Reuters yesterday was incentives don’t matter as much anymore. That’s because he said the incentives program “had driven more traffic to [GM’s] Web sites and customer visits to showrooms,” according to Reuters — and in the past, the “very early days” of a new incentives program would yield sales, not just web site visits.
Does this mean incentives as the mechanism for car sales is over? Perhaps. Wagoner said GM views the auto market as “unsteady.” The company does not know when the auto market will rebound.
“Our confidence in the market is not so good right now. Obviously, it’s pretty weak now in U.S. sales,” he told Reuters. “Eventually, it will come back, I just can’t tell you when. At this point, it still seems pretty uncertain out there.”
We may look back on GM’s “employee discount for everyone” program as proof positive that incentives as sales driver just doesn’t work in the auto market downturn of 2008.
