- 10 -
monthly payment to GMAC due on the retail customer's RISC for a
stated period.
C. Oversight of Incentive Programs
During the 1980's, GM's "Price Review Group" made the
decision to provide dealer incentives, incentives to dealership
salespeople, and retail sales incentives.
D. Retail Rate Support Programs
1. History and Overview
Around 1980, the domestic car market in the United States
was extremely depressed. The United States was coming off the
second oil shock. In 1980, GM incurred only the second year of
losses in its history. It was a traumatic time for GM, and there
was a lot of effort and work going on at GM to try to stimulate
sales of motor vehicles.
At this time, GM was offering direct rebates to customers;
however, the programs were not effective at increasing sales of
GM vehicles to the desired levels. GM executives believed that
sales were depressed due to the very high interest rates that
were present in the U.S. economy at the time. During 1980, the
prime rate of interest hit a high of approximately 21 percent.
GM was considering using sales allowances to try to find
something that was more attractive to customers than rebate
programs, which had lost their luster in the then existing high
interest rate environment. In 1980, GM executives made proposals
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011