EMPLOYE PRICING WIPES OUT INVENTORIES FOR MANY DEALERS!

Automotive News---August 2005

For many dealers, the Big 3's decision to extend employee-discount-for-all deals on 2005 models won't mean much. The reason? After the discounts set summer sales ablaze, there aren't many 2005 vehicles left. Chevrolet dealer Edgar McGraw normally has 120 vehicles from the outgoing model year on his Camden, Ala., lot in early August. This year he has fewer than 20, he says. General Motors' Employee Discount for Everyone promotion in June and July drained his new-car inventory to a 10-year low, McGraw says. That means McGraw isn't expecting the promotion, extended for a third month, to help August sales. "We'll have some dead time, but we'll just have to move the used cars," he says. 'Almost out' Dealers say small stores are hurting the most. Steve Lindsey, sales manager at Superior Chevrolet in Merriam, Kan., says his store has adequate inventory. But, he says, "The smaller dealers are done. They're barbecued from it." Said Henry Oliveros, a salesman at Bredemann Chevrolet in Park Ridge, Ill.,"We have a few, but it's almost out. We have about three or four Cobalts, about eight of the Malibu and six of the Impala, five of the Suburban and Tahoe, and about eight Aveos and a few trucks. But it's not just me, everyone else in town is having a tough time."