General Motors made summer sales sizzle when it announced that, for a limited time, customers could purchase 2005 model vehicles at "employee discount" prices. The price-slashing move was a first for the auto industry, resulting in a 41 percent spike in GM sales for the month of June. The rush on GM dealerships prompted Ford and DaimlerChrysler to offer their own employee-pricing plans in July, and the incentive was so popular that the Big Three automakers extended the promotion beyond their original deadlines.

The numbers show that the trial run of employee pricing was an unparalleled success: 1.8 million automobiles were sold in July, the highest sales figure for any month in the 109-year history of the U.S. auto industry. Analysts believe the spike is a validation of the employee pricing model which eliminates haggling over price and gives consumers access to a popular perk associated with working in the automobile industry.

Now that the summer discount has ended, GM hopes to lure buyers with low prices on 2006 models. The automaker says it plans to use incentives more sparingly, targeting them at specific vehicles only. The strategic shift could be a sign that the era of big sales incentives--an era that began with zero-percent financing plans in the wake of the 2001 terrorist attacks--is finally over. Analysts say the big automakers aim to wean customers off incentives in the year ahead and establish their brands as a good value.