GM Reports 326,300 June Deliveries down 22 percent

[give_it_all_]

Is this readjusted? Because Toyota is up 6%, but they adjusted their sales. I didn't see anything in the article about GM doing that this month.

[Havasavana]

Originally Posted by SmallBlock

Let's rename the board GMOverreaction.com.

Once again, it's big picture time.

What's the major event coming up? Anybody? Anybody? Bueller?

Oh yeah, that's right. UAW negotiations. Go take a look at historical GM sales rates and overlay it with the UAW contract cycle.

When did the Employee discount thing happen? I bet you don't remember that it was the year AFTER they signed the last agreement. Why would you want to massively boost sales (and give the UAW a major plank to stand on) when your raison-d'etre is to finally get the monkey off your back?

And don't give me this crap about GM not being able to a damn thing to control sales. This market is driven almost entirely by gasoline prices and cash on the hood. Look at the vehicles with the highest incentives.

So, what we have here is most likely a case of GM not playing the incentive game, which ends up being a win-win-lose scenario for them.

WIN Lower incentives help resale values in the long term and boost profits.

WIN Sales are lower, which going to the negotiations with a severely crippled UAW is a good thing long-term (the end of the anachronism).

LOSE Short term sales are off, leading to much fretting and general unease by the media and stock markets.

Long term gains will always outweigh short term loss in my books.

Please resume your whining. Don't forget to genuflect in front of the chrome mushroom.

I don't agree that GM intentionally suppressed sales. Take the TrailBlazer/Envoy as an example. $4k or 0% for 60 months on the hood and sales collapsed. I haven't looked at any patterns between contract talks and sales, but if sales decline when talks are ongoing or about to start, I'd attribute that to employees not buying during times of uncertainty, and I'm afraid that GM employees and suppliers constitute a significant part of GM sales. Those sales not to fleets of course. So as GM and Delphi downsize, GM sales are under more pressure.

[saturnsteve]

So the GM Lambda's lead the segment. This is good news isnt it?

[SmallBlock]

Originally Posted by Havasavana

I don't agree that GM intentionally suppressed sales.

I'm not saying that GM intentionally suppressed sales. I'm saying that they didn't join in the incentive game as much as everyone else. And kudos for them for doing it.

Trailblazer/Envoy are heavily subsidized because they are walking dead men, and a subpar product compared to their replacements, the Lambda triplets. Vehicles like that are the ones that need to be sprinkled with fairy-crack and shipped off the lot instantly.

I'd be the first one to chastise Wagoner et al if they did break their promise and jumped in the fray. The fact that they are sticking with their plan of:

1) Reducing fleet (although I'm getting tired of that being their cover story)
2) Lowering Incentives (getting out of the crack dealing business)
3) Lowering overhead/cost
4) Bringing out kick*** products

is just what GM needs to not only stay alive but prosper.

Believe it or not, given their situation, I'd say the GM is playing their hand decently.

[slowinthefastlane]

Originally Posted by Ming

GM has a serious problem advertising cars like this.

This is the problem with having too many divisions putting out too many variations of the same car. GM's advertising budget is spread way too thin to launch products. Why is there an Aura at all? Why wasn't it released as the new Malibu?

Advertising costs way more money now than it did back in the '60s. Television rates have skyrocked in the last 40 years - and now you need to target hundreds of TV channels, rather than just the 3 networks. Besides television, your adverstising budget needs to be spread amongst radio, print, internet, direct mail, product placements, and outdoor advertising. In order to place those ads effectively, you need to spend tons of money on consultants and focus groups to target whatever segment you are looking to target.

This is the main reason, if there is any other, that GM needs to either shed off some of its divisions. Toyota doesn't have this problem - they just have Toyota, Lexus, and Scion to support. There's little product overlap in their lines.

[1931Chevy]

IMO one of the problems with the Aura is that it has not too many dealers around the nation

[steverino]

Originally Posted by vxl

Mark LaNeve must be the most optimistic guy on the planet. He keeps spouting this spin as every month GM's sales get worse. I'm afraid GM's finished.

It's his job. Let's not forget that basically he is an overpaid salesman

[Geotpf]

Originally Posted by nsap

Yup. It's a FLOP. For God's sake, the ION out-sold it! Sadly its not a product-related flop, its a MARKETING flop. I swear, if GM does not get their **** together in terms of new-product marketing, they might as well not bother with class-leading product like the Aura, Outlook, Acadia, and Enclave. Pathetic.

The problem with it is (marketing-wise) is that people equate Saturn with cheap plastic compact cars, and therefore the Aura (or Outlook for that matter) is too expensive, no matter how good a vehicle it is. It doesn't look like this stigma will ever go away.

[stevecmh]

thats disappointing

[1931Chevy]

Originally Posted by saturnsteve

So the GM Lambda's lead the segment. This is good news isnt it?

I dont know since the sales of the 3 lambdas where of about 15k units and the same goes for Fords twins

[tgagneguam]

Originally Posted by SmallBlock

Apparently Goldman Sachs has greater information on what's really going on. But since the tenor of the conversation is so negative, they must be mistaken by upgrading such a dog. I guess they also just don't get it (Wink, Wink, Nudge, Nudge).

Goldman Upgrades GM On Likely Concessions During Upcoming UAW Negotiations
Posted on Jun 26th, 2007 with stocks: GM

http://transport.seekingalpha.com/article/39345

Look. GM's probably only got one shot to massively improve their labor costs. The UAW has never been in this weak of a state before. You don't jeopardize that by laying huge incentives down in a market almost entirely dictated by cash on the hood. One month of good sales this close to negotiations is as good as a year.

What's more important to GM? 6 months of good sales, or reducing your labor costs and associated burdens permanently?

I hope you'd choose the latter. Two winks, three nudges.

Funny.

While you may [rightfully?] take exception to my calling you on your take-and let's face it, SmallBlock, when you open your response with "Let's rename the board GMOverreaction.com. Once again, it's big picture time. What's the major event coming up? Anybody? Anybody? Bueller? Oh yeah, that's right. UAW negotiations. Go take a look at historical GM sales rates and overlay it with the UAW contract cycle...," it comes across as a bit snotty and touches a nerve with me.

Again, I've been listening to people both within and outside of the Company explain away what comes across simply as gross mismanagement. People label it what they choose-and those who label it as brilliant clairvoyance always strike me as a bit funny-but really, if the Company were managed properly, would it be in the predicament it's in? Of course not. While it's nice to say that GM has carefully crafted its sales to reflect its current dilemma, historically GM has not shown such insight, and it's also why I find your explanation a bit suspect.

To be clear, since so many people struggle with this concept: there's more ways to increase sales than simply incentivizing vehicles or dumping vehicles into fleet. I'm not really a proponent of either.

Interestingly, if you read the article that you directed me to, Goldman's upgrade just as much reflects a compromised company whose position in and of itself suggests concessions are to be had and not necessarily that management has made any strides in truly righting a decades-beleaguered automaker. To that point, I absolutely agree.

Based on a variety of factors, including a statement contained within the article you directed me to:

To be clear, we see GM’s long term fundamental outlook a challenge due to volume mix and pricing pressures.

I stand firmly by my believe that GM is improperly managed. And following the UAW negotiations this year, there's a strong bet sales reports will carry the same headlines, just like they did after previous labor negotiations: Toyota up, GM down. Of course, the rationalizations will change to fit the times; they at least extend that courtesy to us.

I think I'll pass on GM stock... again. I'm a long-term, dollar-cost-averaging kinda guy, and GM doesn't seem appealing from that perspective, Goldman's endorsement notwithstanding.

And don't be confused, SmallBlock, I enjoy your posts, even if I don't at all agree with your position in this case.

[emh]

Originally Posted by racy

Good question: But let's define "move on".

GM's historical definition has been, to let it rot on the vine, and discontinue. I am not for this style, and believe it to be a major part of GM's woes. They don't stick with anything.

GM's philosophy is "If at first you don't succeed, quit". If GM were a football team, their offensive strategy would be "First down, then punt".

If however, we define "move on" to be "keep the name to build recognition, immediately look where we're going wrong and correct the faults", then I am all for it.

Completely agree!!! If Toyota does stuff the way GM has done, they would have quit the full-size truck market after the T100. Honda would have quit the minivan market after the first gen Odyssey.

[Hotspur]

Originally Posted by nsap

Yup. It's a FLOP. For God's sake, the ION out-sold it! Sadly its not a product-related flop, its a MARKETING flop. I swear, if GM does not get their **** together in terms of new-product marketing, they might as well not bother with class-leading product like the Aura, Outlook, Acadia, and Enclave. Pathetic.

I hate GM as much as the next guy, but the Aura's only real flaw is the unrealistic sales expectations it has to carry. It takes years to reverse a negative trend. GM's continual hopes for home-run products will never materialize.

The same magical-thinking cloud that surrounded the Aura has now moved on to the next CTS. A good car, maybe great, but sales will be marginal at best. There will be no "home run" no matter who markets it or how.

Be ready for a long, long fight (and a bankruptcy....).

[rimtrim]

An interesting bit about the Aura: My dad decided to replace his '98 Olds Intrigue last month. He narrowed it down to an Aura XE and an Accord SE V6. He bought the Accord. The main reason why? After discounts, trade-in value, etc., the Accord was cheaper.

Doesn't that kind of turn the conventional wisdom on its head? We always hear that Japanese cars are more expensive, but people buy them because they like them so much better. In this case, the cars were equally matched, and the Japanese car won on price!

-Andrew L

[smk4565]

Sales are always down, until they get great small and midsize cars they will continue to drop. 50% of the people don't want a truck or SUV, and GM's car lineup is weak, if they make some great cars that get 35-40 mpg, they will win back buyers. There are still way too many bland sedans like the Impala (I know it sells) and LaCrosse and G6, those are ho-hum cars.

If the Camaro was out now, it would sell huge because of Transformers.