Why Chevy is launching another employee pricing campaign

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Chevrolet launched a national sales campaign for employee prices at the end of the year on all 2018 and some 2019 models.

Such programs, when car manufacturers offer employee discounts to the general public, are usually effective in increasing short-term sales and cleaning up older stocks. However, they have also been criticized for shortening profit margins and increasing sales in the coming months.

Chevrolet's exclusive "Employee Discount for Everyone" covers the lease or purchase of all 2018 models and 2019 Equinox, Traverse, Colorado and outbound Silverado 1500 Limited models. Fleet sales and a few basic finishes are excluded from the deal, which will continue until 2 January – one day before automakers announce the sale.

The campaign is modeled on a sales program for employees from a year ago that was "very successful in boosting sales and also strengthening the brand and connecting with customers," said Jim Cain, a GM spokesperson.

According to him, the promotion of last year led to "a fantastic December and a robust January" for the sale of the company. Chevy, after record sales in the sector in 2016, reported a year-on-year decline of 2.9 percent in December 2017, followed by an increase of 5 percent in January and a fall of 8.8 percent in February.

Since 2005, car manufacturers – mainly domestic – have been using the price of employees to clean up older stocks, but also when sales are stagnating or the economy is shrinking.

"It's something that you do not necessarily see very often, and it's usually not because the sales are great and through the roof," says Kelley Blue Book and Autotrader Executive Publisher Karl Brauer. "It's usually when car manufacturers want to move some iron and their traditional tactics do not work as well as they need."

The use of employee prices on a limited basis is not necessarily harmful, but Brauer said that if such promotions are continued for a longer period of time, they could be red flags for the industry.

The discount rate for the Chevy program varies by model and can be added to other offers, such as the total cash compensation.

On its website, Chevrolet advertises a $ 12,500 limit for a 2018 Silverado LT All-Star crew cab. This includes an employee discount of $ 5,000, total cash compensation of $ 6,750 and $ 750 discount on the option package when funded through GM Financial.

Many of GM's car's are discounted between nearly $ 4000 for a Spark minicar to over $ 8,000 for an Impala large sedan.

Subsidized crossover and SUV discounts range from about $ 4,400 for a major Crossover transition to more than $ 11,100 for full-size Tahoe and Suburban SUVs.

The price of employees is for everyone, regardless of how the vehicle is financed; however, other offers require that customers finance via GM Financial.

Autodata Corp reports that Chevrolet's average incentive to November was $ 4,723 per vehicle, an increase of 5.5 percent compared to the same period a year ago. That is comparable to the brand average of $ 3,733, an increase of 2.5 percent.

Other General Motors brands also carry promotions, but do not mention employee prices.

The Automotive News Data Center estimates that GM sales fell by 1.4 percent in November to November, including a 1.3 percent decline for Chevrolet.