So, were auto prices just too high?

[Ghoulish Delight]

And is a more permanent price adjustment in store?

For anyone who hasn't been following, after GM announced that they were hemoraging money, they went out on a limb and started selling their enitre 2005 stock at the employee discount price. Those discounts, depending on the vehicle, can be quite substantial, up to a few thousand dollars.

The result? 41% increase in sales. It was so successful that Ford and Chrysler followed suit. Despite insistance to the contrary, GM has extended the promotion beyond the original Aug 1 end date to the end of September, and it's now encompassing some of their 2006 models. Ford as well is going through September, and Chrysler hasn't even announced an end date.

So is this a sign that the industry had allowed prices to drift a little too high for the market? Or is it just a psychological reaction to the phrase "employee discount"? I wonder if they'll try to get away with doing another "employee discount" promo at the end of the 2006 model year, but perhaps make those discounts not quite so deep. I also wonder if there's a legal requirement that if they say "employee discount" then it has to actually match their employee discount.