American import brands, Cadillac, and Chrysler, are offering an extraordinary discount of retail price, amounting to 10 million won. Thanks to that, their objectives of slimming down inventories may have been achieved, but the brand credibility must have been damaged a great deal due to such abnormal price reduction.

GM Korea offered ‘ATS gas-subsidy promotion’ to the customers in August, which is equivalent to 10 to 12 million won, or over 20% of the car price at 47.5 million won.

The effect of the promotion program was immediately realized. For the month of August, the sales of Cadillac ATS 2.0 registered 53 units. It is comparable with that of the first seven months of this year, standing at 43 units. The total sales of Cadillac upto August this year soared to 241 units, from 161 units upto July.

In September Chrysler Korea released special discount promotion for 300C models. For 300C diesel model, 11.5 million won, while 300C 3.6 and 300C AWD, over 10 million won reductions were offered. The incentives for 300C diesel are only for 400 units at most.

Earlier, Chrysler Korea had a promotion for Fiat 500 with a markdown of 10 million won. Accordingly the sales of Fiat 500 that stood at less than 50 units per month hiked in May and June, registering 500 units for the two months.

The aftermath is not little, however. The aggressive promotion had customers ebb away after the hilarious event. The resulting aftereffect was bigger than the short-term effect of sales increase or streamlining the inventory.

For consumers, purchase of the brands that lost price credibility is somewhat hesitative. Especially such a promotion is deteriorating the brand image of imported cars. Furthermore, when the complaints and pullout of existing customers are taken into account, it seems to be more than that.

The persons in charge confessed that “A simple discount of the car price for a short-term sales hike is the worst strategy.” They added that “Subsidies for maintenance costs, such as extending warranty period or offering consumables will have more positive effect in the longer term,” referring to the examples of GM Korea’s Chevy Care 3-5-7 or Ford-Lincoln’s 5 year-100 thousand kilometer warranty.