Automakers jockeyed incentives during July

[Ming]

Automakers jockeyed incentives during July
August 5, 2007
By Katie Merx
Freep.com

General Motors Corp. raised its incentives to better compete with generous deals from rivals, but the incentives remained low in the category, and sales of its pickups were down nearly 30% in July from a year ago.

Ford Motor Co. lowered its pickup incentives slightly in July, and sales followed. The automaker's incentives remained in the middle of the pack as it works to keep its popular truck line selling until it unveils a redesign for the 2009 model year.

Chrysler has offered hefty incentives on the Dodge Ram to spur sales of the segment's oldest design.

Toyota has offered uncharacteristically high incentives on its new full-size pickup as it works to establish its truck as a contender despite a tough sales environment. Sales are soaring.

http://www.freep.com/apps/pbcs.dll/a.../1002/BUSINESS

[HoosierRon]

Well... if people would rather buy a $33,000 truck with a $3,000 rebate, rather than a $30,000 truck, I suppose GM should give then what they want.

[likearock00]

Originally Posted by HoosierRon

Well... if people would rather buy a $33,000 truck with a $3,000 rebate, rather than a $30,000 truck, I suppose GM should give then what they want.

See, that is the problem with American buyer though. Many buyers are upside down on their vehicles. If they have a $3000 rebate, it helps them get out of their situation much better than having to roll it over. I know it doesn't really change anything, but many buyers feel as if it does. If GM raised their prices and offered larger rebates, the sales figures might just go up.

[armycam68]

People are not real stupid! The end of the year incentives are lower than they were in the Spring. Who would buy an 07 vehicle when the discount is only $1500-2000 less than an 08.
I bought an 07 Impala in May that would "now" cost me an additional $3000. There is something wrong with this picture. It's like buying day old bread at a higher price!
All the 0% offers actually cost more than taking a rebate........... but GM is banking on a bunch of stupid people out there............

[JazzyChef]

Originally Posted by likearock00

See, that is the problem with American buyer though. Many buyers are upside down on their vehicles. If they have a $3000 rebate, it helps them get out of their situation much better than having to roll it over. I know it doesn't really change anything, but many buyers feel as if it does. If GM raised their prices and offered larger rebates, the sales figures might just go up.

GM has been trying for the past few years to get out of that kind of thinking. GM lowered the prices on their vehicles to avoid using massive incentives. At the same time when you push heavy incentives out on vehicles, the resale value will drop significantly. It has the same effect when a vehicle goes to the car rental companies. I praise GM for not using the incentives to sell their vehicles. Once the first year dies off on the tundra it will go back to selling like it did before with maybe an extra few thousand vehicles per year. Just wait till they see next year's comparison sales, I can see it now.. "Tundra sales are off 33% July 2008 compared to July 2007." Every first year vehicle has huge sales then it dies off

[ColinOpseth]

Originally Posted by JazzyChef

Every first year vehicle has huge sales then it dies off

Not to be facetious, but the Cadillac CTS is one of the few vehicles where sales went UP each year.

[CaptianStu]

Originally Posted by ColinOpseth

Not to be facetious, but the Cadillac CTS is one of the few vehicles where sales went UP each year.

So did the old tundra I think. At least it was fairly level to a little higher almost every year.

[roteague]

Originally Posted by likearock00

See, that is the problem with American buyer though. Many buyers are upside down on their vehicles.

There was an article here a couple of months ago, I think, that said Toyota was targeting these people with their incentives on the Turda.

[Pucks]

Originally Posted by likearock00

See, that is the problem with American buyer though. Many buyers are upside down on their vehicles. If they have a $3000 rebate, it helps them get out of their situation much better than having to roll it over. I know it doesn't really change anything, but many buyers feel as if it does. If GM raised their prices and offered larger rebates, the sales figures might just go up.

One of the arguments GM was using for the new "value" pricing or whatever they call it was that when people did online shopping, the MSRP of the GM cars was higher than comparable cars from competitors (before the rebates kicked in). So they lowered the price or kept it flat. But it seems that this strategy will take awhile to work. Many people are still waiting for 0% on everything or an employee pricing disaster, etc.

[johnct2005]

No people actually are this stupid.

[asim]

Originally Posted by HoosierRon

Well... if people would rather buy a $33,000 truck with a $3,000 rebate, rather than a $30,000 truck, I suppose GM should give then what they want.

Thats pretty much what GM does. Periodically GM raises the prices of their new vehicles (a few hundred dollars every few months, and then until a whole new price for the next MY). At the same time, GM is increasing incentives on these cars. So it evens all out at the end.

[dlr]

People are buying 'the deal' and in Toyota's case, also the name.

I've lost a few customers to Toyota and mainly because they get mad that the GM trucks needs rotors after about 20K mile in the northeast due to the salt and sand.

GM will lose sales in the NE because of this. I believe that is why in 2005 they put drums on the backs of the 1500's.

[chade]

Living in the land of winter and salt (Minnesota), I have never had or heard of an issue with rotors having problems due to salt. ???

Therefore, I don't believe this will impact the sales of Chevy's vs. Tundras. Here is the Midwest, I see a ton more new Chevy's than new Tundra's on the road.

[hdmax]

Originally Posted by CaptianStu

So did the old tundra I think. At least it was fairly level to a little higher almost every year.

That is not at all true. the tundra NEVER met toyota's goal until they came out with the crew cab, and even ten sales slipped each year after 2005.