GM begins clearing dead brands

Detroit: General Motors is offering heavy incentives to clear out its remaining Saturn and Pontiac cars.

The carmaker hopes the programme will rid it of the final reminders of two brands headed for the auto graveyard. But an analyst says the incentive is "more hype than substance".

Assuming the cash is passed on to consumers, the move could result in savings for buyers looking to snap up one of the few remaining unsold Pontiacs and Saturns. But the savings might not be as much as one would think.

To qualify for the incentive, dealers have to put the vehicles in their rental or service fleet before selling them to consumers. That means they technically would be classified as used vehicles when they are sold to the public, though buyers apparently would get a new-car warranty.

Margin of benefit

GM already is offering $6,500 in incentives on new Pontiacs, including zero per cent financing for up to 72 months. So that narrows the margin of benefit on those vehicles even further, according to online auto information site Edmunds.com.

"This programme is more hype than substance," said Jessica Caldwell, Edmunds.com analyst. "There is no benefit for the consumer to purchase a used vehicle when a new vehicle can be had for a similar price."

"It's designed to help us clear the deck so we can more quickly… focus on our four core brands — Buick, Chevy, Cadillac and GMC," GM spokesman Tom Henderson said.

Changed plans

On December 2, 2008, General Motors announced that it was considering eliminating several brands, including Pontiac and Saturn. Under the original plan GM decided that Pontiac would produce "niche" models aimed at the "youthful and sporty" segment, but did not provide specifics.

On April 27, 2009, GM officially announced that Pontiac would be dropped and that all of its remaining cars would be phased out by the end of 2010.

— Staff Report