GM to Institute ‘Value-Pricing’ Strategy in Fall : Autos: Campaign in California could mean lower prices on many models. Company seeks to regain lost market share.

In a move that could change the way many Californians buy cars, General Motors Corp. is preparing to launch a “value-pricing” strategy this fall that could mean lower prices on many of its models.

The planned California campaign draws on pricing policies that GM and other car makers have implemented successfully on certain models nationwide, helping boost sales this year despite low consumer confidence.

GM’s aggressive move--scheduled to coincide with the launch of 1994 models this fall--is designed to increase the auto maker’s share of the prime California market. GM controls just 20% of California sales, compared to 34.4% nationwide.

J. Michael Losh, GM’s vice president of North American vehicle sales, outlined the new strategy in meetings with California dealers in Los Angeles and Oakland last week.

“GM has to do something to regain market,” one GM dealer said. “They are in the tank. The dealers are getting killed.”

The marketing push--coming as GM struggles to regain profitability--could give GM dealers an advantage against their Japanese competitors, which have been forced to raise prices substantially because of the yen’s rise against the dollar.

Value pricing involves offering several options as standard equipment while cutting a car’s sticker price. There are no rebates or special financing deals--features that often confuse customers.

“We are in a period of price transition,” said Frank Ursomarso, a Pontiac dealer in Wilmington, Del., and director of the National Automobile Dealers Assn.

The program has some similarities to the one-price, no-dickering policy of GM’s Saturn dealerships, but allows some room for negotiation. Saturn dealerships have been praised for their customer service; indeed, training on their methods will be provided to other California GM dealers as part of the marketing push.

Still, “this is not a no-dicker deal,” said Jerry Kuske, owner of Beach Oldsmobile in Huntington Beach.

Kuske noted that a one-price strategy can be effective for dealers with exclusive territories, such as those enjoyed by Saturn distributors. But when there are several nearby dealers selling the same brand, he said, they won’t stick with a one-price policy.

Some dealers expressed concern about the program because it could lower their profit margins on sales. When the manufacturer lowers the suggested retail price, that limits maneuvering room for the dealer.

However, GM argues that by pricing vehicles attractively, customers recognize the “value” in a deal and are more likely to buy--thereby boosting dealers’ sales volume.

That’s what happened in April, when Chevrolet lowered the price of its Cavalier in a value-pricing campaign. GM marketed the 12-year-old model--equipped with anti-lock brakes--at less than $8,000. The result: Cavalier was the top-selling car in April, outselling Ford’s Taurus by 29,657 to 29,361.

GM has had similar success with value packages on the Oldsmobile 88 and Buick Regal.

The extent of the value-pricing program in California remains unclear. But GM spokesman Carl Sheffer said it is expected to involve all of the car maker’s brand names: Chevrolet, Oldsmobile, Pontiac, GMC Truck, Cadillac, Buick and Saturn.

Times Staff Writer John O’Dell in Orange County contributed to this report.