"We floated the idea of linking this up with a retail incentive to our dealer advisory council about 10 days ago, and they were wild about the idea," Mitsubishi Motors North America spokesman Dan Irvin says. "We believe consumers will value an incentive that is straightforward and relevant to their lives."
This may be the Year of Employee Discount Pricing for the Big Three automakers (General Motors, the Chrysler Group, and Ford Motors). But foreign competitors believe that add-ons are a more effective incentive.
As the Big Three's deep discounting is winding down, Mitsubishi Motors North America is rolling out a program that rewards buyers of new 2005 model-year vehicles with a year's worth of gasoline.
Mitsubishi spokesperson Dan Irvin says the automaker's internal research showed that customers' top economic concern right now is the price of gas. "We floated the idea of linking this up with a retail incentive to our dealer advisory council about 10 days ago, and they were wild about the idea," he says. "We believe consumers will value an incentive that is straightforward and relevant to their lives."
All buyers of a new 2005 model-year Galant, Endeavor, Montero, Outlander, Eclipse Coupe, Eclipse Spyder, Lancer, or Lancer Evolution will receive prepaid debit cards totaling $1,500-$2,500 that can be used for gasoline at most major motor oil companies' retail locations. The amount varies by vehicle based on the estimated amount of gas required to drive the new vehicle for 12,000 miles and whether the recommended fuel for the vehicle is regular or premium, at prices reported by AAA's Daily Fuel Report on Sept. 19.
The timing of Mitsubishi’s Gas Comes Standard offer couldn't be better. Oil refineries in the Gulf region have been closed since Hurricane Katrina destroyed parts of the Alabama, Mississippi, and Louisiana coastline last month, and more are closing on- and offshore as Louisiana and Texas brace for Hurricane Rita. The impact could shoot the price at the pump to more than $4 a gallon, according to many oil analysts.
Though employee discount pricing has helped the Big Three move 2005-model cars and light trucks off dealer lots--as evidenced by record volume sales this summer--analysts have warned that the practice will cause only a spike in sales, much as 0% financing did post-9/11, and that sales will slip once the discounting craze ends.
Earlier this year, Volkswagen piloted a free insurance incentive in Illinois and Wisconsin, in which drivers who bought or leased a new Golf, New Beetle, or New Beetle convertible received a year of free auto insurance. Volkswagen lured younger and higher-risk drivers by paying the insurance premiums for one year, using a new insurance model that bases risk on the car model rather than a driver's profile.
Though the program was not launched nationwide, the VW in the Car incentive showed signs of success – dealers in those states reported a sales incentive of 23% in those models, while those in most of the rest of the country posted sales declines.
