GM Capping the Price of Gas. Is this the Beginning of the End?

gmlogo.jpgAs reported widely (LA Biz Journal, Treehugger), General Motors will offer a one year gasoline credit for buyers of new SUVs and full sized cars in California and Florida. Drivers will only pay a maximum of $1.99 per gallon for one year after the purchase date. This coincides with GM’s claim to be “going green”. Amazing.
From a business perspective, I’m trying to think of how this is good for GM in the long term… Are they trying to dump their worst performing models on an unsuspecting populace? Are drivers really stupid enough to take the bait? It seems like a classic short term view, the kind of thing that will come back to burn GM hard in the long term as people finally start wising up, or more likely, are forced to change to more efficient vehicles when they realize the price of gas isn’t going anywhere.
It’s time to dump the old addage that “What’s good for GM is good for the USA”. The dead opposite is increasingly true.

Nick Aster is a new media architect and the founder of has grown to become one of the web's leading sources of news and ideas on how business can be used to make the world a better place.

Prior to TriplePundit Nick worked for Mother Jones magazine, successfully re-launching the magazine's online presence. He worked for, managing the technical side of the publication for 3 years and has also been an active consultant for individuals and companies entering the world of micro-publishing. He earned his stripes working for Gawker Media and Moreover Technologies in the early days of blogging.

Nick holds an MBA in sustainable management from the Presidio School of Management and graduated with a BA in History from Washington University in St. Louis.

3 responses

  1. Nobody ever went broke underestimating the intelligene of the American consumer. Of course this will work, and of course it will backfire. It’s the American Way.

  2. i have seen car deals like this here in the Philippines. they offer one year’s amout of fuel and i told myself, surely there is a catch. who would want to subsidize me one year’s amount of juice, right? as it turns out, the fixed cost components of the cars have already been recovered and they are selling at a “loss” just to move units. almost had myself duped there hehe.

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