Blog: Dave LeggettEmployee discounts

Dave Leggett | 27 June 2005

Looks like GM is enjoying bumper sales this month in the US on the back of an employee discount scheme. You have to hand it to the marketing fellows at GM – they keep coming up with new ideas to shift the product. Good or a bad thing? On one hand, discounting is not exactly a good scenario: it would be better to see the cars flying off forecourts on firmer prices with bigger margins because people actually want the products. But on the other hand, if the discounts cause drivers of other make vehicles to consider GM products, conquest sales are well worth having.

But I can’t help being reminded of MG Rover’s employee discount scheme (Privilege Vehicle Sales – PVS - they called it and it was extended way beyond employees also) published in some UK trade publications up until very recently. There was a neat chart – ‘family tree’ - which made it very clear that the criteria for qualification for the PVS applicant’s family were pretty broad. And the discounts were a not to be sniffed at either - up to 25%. Wife’s sister’s second cousin, twice removed? Come on in. And do they have relatives too?

The danger is that if qualification for big discounts is set too wide and many people get to hear about it, then those that don’t qualify for the scheme ask for similar discounts because, well, why should they be penalised when every man and his dog seems to get an employee discount?

Oh, and there's another slight problem. Once you start a programme like that, how do you stop it?

USA: GM’s employee discounts boost June light vehicle market – Edmunds


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