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Employee Car Vouchers to Rev Sales for Big Three

October 16, 2003

A cash incentive for their retirees to buy new vehicles could pay off in better year-end sales for Detroit's Big Three automakers, according to the Detroit News.

The recently ratified contract with the United Auto Workers (UAW) calls for 465,000 retirees and surviving spouses to receive two $1,000 vouchers toward the purchase of a new car or light truck. The first vouchers will be distributed Nov. 1, and executives at General Motors Corp., Ford Motor Co., and DaimlerChrysler AG hope the cash can spur all-important year-end vehicle sales, the News said.

"This could really help us sell some cars," Ford division president Steve Lyons said this week.

In the heated competition to lure consumers into their showrooms, GM, Ford and DaimlerChrysler have been particularly aggressive in courting their own employees, retirees and suppliers with special incentives, according to the News. DaimlerChrysler's Chrysler Group, for example, recently offered employees a one-year lease deal for a flat

rate of $2,000. Chrysler also has increased the number of employee-discount certificates available to its dealers, the News reported.

Special incentive deals for employees represent a significant amount of business in the U.S. market, according to industry analysts. More than 3 percent of all vehicles sold in the first nine months of this year went to constituents receiving in-house deals from auto manufacturers, said Art Spinella, president of CNW Marketing/Research in Bandon, Ore. "The total share of sales through these kinds of programs for employees or suppliers is 3 1/2 percent," Spinella said. "That's about 575,000 vehicles so far this year."

With dealer inventories high, employee-related deals help clear out backlogs and also encourage buyers to upgrade to pricier models, according to the News.

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