GM has unveiled a GM Fuel Price Protection Program that caps the per-gallon price consumers pay for gas at $1.99 when they purchase select 2006 and 2007 GM full-size utility and mid-size cars.
To participate in the program, consumers who reside in California and Florida must purchase or lease and take delivery of an eligible vehicle by July 5. They must enroll in the OnStar Vehicle Diagnostics service, an in-vehicle communication system. Eligible vehicles include the 2006 and 2007 Chevrolet Tahoe and Suburban, Impala and Monte Carlo; GMC Yukon; Pontiac Grand Prix; Buick Lucerne and LaCrosse.
In the program, OnStar records customer’s estimated fuel usage each month and the mileage rating for the vehicle. Based on calculations, customers will receive a credit each month in the form of a pre-paid card for the difference between the average price per gallon of premium fuel in their state, and the $1.99 gas price protection cap.
“The primary goal is to reach current customers and attract new ones to the GM family of vehicles,” said Amy Schwinge, spokesperson for GM’s Southeast region. “…We will consider running [the program] nationally if the consumer response indicates it’s a success and fuel prices remain at elevated levels.”
The credits are good until December 31, 2007 and may be used for purchases at any location that accepts MasterCard. There is no mileage limitation.
A California resident who purchases a 2007 Chevrolet Tahoe and drives 1,000 miles a month, would realize an estimated $103.75 monthly credit, based on a current average premium fuel price of $3.65 per gallon in that state. A Florida resident who purchases a 2006 Buick LaCrosse and drives the same distance, would see an estimated monthly credit of $60, based on the current average premium fuel price of $3.19 per gallon in that state.
Consumers can also go to a Fuelprotection.com Web site to calculate their potential savings based on their vehicle selection.
TV, radio, print and interactive ads support in the regions the promotion covers.
Using incentives to attract consumers have always been a major part of GM’s and other automakers’ marketing mix. The gas-rebate program may help the Detroit-based automaker rebound after poor sales resulted in a $8.56 billion loss last year.
Edmunds.com, an online resource for automotive information, reported that the average automotive manufacturer incentive in the U.S. was $2,367 per vehicle sold in April 2006, down $67 or nearly 3% over last year. But among vehicle segments, large SUVs continued to have the highest average incentives, $4,925 per vehicle sold, followed by large trucks at $3,613. Incentives expenditures as a percentage of average sticker price also shows large SUVs averaged the highest, 12.9%, followed by large trucks at 11.7% of sticker price.
“We anticipate that large SUVs and trucks will need increasingly more generous incentives as gas prices inevitably continue their seasonal climb,” said Dr. Jane Liu, VP-data analysis, Edmunds.com in a statement.
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