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At GM, Desperate Times Call For Incentives

To counter unexpectedly weak demand, General Motors is extending the same discounts enjoyed by its employees to all buyers of its cars. The decision reverses a two-year effort to eliminate employee-prices-for-everyone schemes.

The new deals cover almost all 2008 models and some 2009 models. The offer typically cuts 10-12% off a vehicle's sticker price.

Incentives seldom fail to bring more buyers into car dealerships. However, they cause significant long-term damage to manufacturers by lowering vehicles' trade-in values and denting the image of their brands. GM's sales are down by 27% in the year through July.

Read the whole story at Financial Times »

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