GM, Ford raise cash rebates
07-07-2004, 05:02 PM
#1
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
GM, Ford raise cash rebates
GM, Ford raise cash rebates - - Reuters / July 07, 2004 - - Source: Autonews.com
DETROIT (Reuters) -- General Motors and Ford Motor Co.sweetened incentives on Wednesday to lure consumers back to car dealerships after both U.S. automakers suffered significant drops in June vehicle sales.
GM, the world's largest automaker, said it raised cash rebates it offers on most of its sport utility vehicles to $5,000, and to $4,000 for most cars for the 2004 model year.
"That's a major step up in the incentives," said Frank Ursomarso Sr., owner of Union Park Pontiac-GMC car dealership in Wilmington, Delaware. "That shows me that (GM CEO) Rick Wagoner is in a mind-set that he's going to do whatever it takes to capture back (market) share."
Ford Motor Co. raised its incentives by $1,000 to a total of $4,000 on some of its SUVs, including the four-door Ford Explorer. Ford also raised discounts on its poor-selling Freestar minivan to $5,000.
GM's sales, including Saab, dropped 12 percent in June, while Ford fell about 11 percent.
Chrysler, who bucked the June trend with a 1 percent gain in sales, this week renewed its incentives, offering many of the same programs as last month, but raised the cash rebate for the Chrysler Pacifica sedan to $4,000 from $3,500 earlier, a spokesman said.
The Detroit Big Three also continue to offer interest-free financing for terms up to 5 years, despite the recent uptick in U.S. interest rates.
One Wall Street analyst said the new incentives only raised the offers back to spring levels, and he expected more. "It didn't seem like a major step-up to me," he said.
LOST SHARE
June's poor sales left GM and Ford with high inventories, estimated at around 30 percent above normal levels, leading analysts to conclude that higher incentives were on the way. GM and Ford have also lost market share to Asian competitors this year, and company officials have acknowledged that it will be difficult to recover that lost share.
High incentives have helped boost sales in months past, but also cut profit margins and hurt earnings, analysts said.
GM's sales plunged in June after it cut its incentives by an average of about $234 per model, according to Autodata. But GM and Ford also are suffering from an aging lineup of vehicles, poorer quality versus major Asian automakers and increased competition in many segments of the market.
Ursomarso, the auto dealer in Delaware, said that sales had already picked up in July from June, even before GM raised its incentives. "So far this month, I have delivered more GMC trucks than I did all of last month," he said.
After almost two years of trying to reduce its discount spending on key models below arch rival GM, Ford appears to be increasing its spending on consumer incentives. For the first time this year in June, it overtook Chrysler in offering discounts, according to Autodata. Ford's incentives rose to an average of $3,679 per vehicle in June, up from $3,515 in May.
"On some vehicles like Explorer where many, many new competitors are fighting for market share, we want to be aggressive," Ford spokesman Jim Cain said.
DETROIT (Reuters) -- General Motors and Ford Motor Co.sweetened incentives on Wednesday to lure consumers back to car dealerships after both U.S. automakers suffered significant drops in June vehicle sales.
GM, the world's largest automaker, said it raised cash rebates it offers on most of its sport utility vehicles to $5,000, and to $4,000 for most cars for the 2004 model year.
"That's a major step up in the incentives," said Frank Ursomarso Sr., owner of Union Park Pontiac-GMC car dealership in Wilmington, Delaware. "That shows me that (GM CEO) Rick Wagoner is in a mind-set that he's going to do whatever it takes to capture back (market) share."
Ford Motor Co. raised its incentives by $1,000 to a total of $4,000 on some of its SUVs, including the four-door Ford Explorer. Ford also raised discounts on its poor-selling Freestar minivan to $5,000.
GM's sales, including Saab, dropped 12 percent in June, while Ford fell about 11 percent.
Chrysler, who bucked the June trend with a 1 percent gain in sales, this week renewed its incentives, offering many of the same programs as last month, but raised the cash rebate for the Chrysler Pacifica sedan to $4,000 from $3,500 earlier, a spokesman said.
The Detroit Big Three also continue to offer interest-free financing for terms up to 5 years, despite the recent uptick in U.S. interest rates.
One Wall Street analyst said the new incentives only raised the offers back to spring levels, and he expected more. "It didn't seem like a major step-up to me," he said.
LOST SHARE
June's poor sales left GM and Ford with high inventories, estimated at around 30 percent above normal levels, leading analysts to conclude that higher incentives were on the way. GM and Ford have also lost market share to Asian competitors this year, and company officials have acknowledged that it will be difficult to recover that lost share.
High incentives have helped boost sales in months past, but also cut profit margins and hurt earnings, analysts said.
GM's sales plunged in June after it cut its incentives by an average of about $234 per model, according to Autodata. But GM and Ford also are suffering from an aging lineup of vehicles, poorer quality versus major Asian automakers and increased competition in many segments of the market.
Ursomarso, the auto dealer in Delaware, said that sales had already picked up in July from June, even before GM raised its incentives. "So far this month, I have delivered more GMC trucks than I did all of last month," he said.
After almost two years of trying to reduce its discount spending on key models below arch rival GM, Ford appears to be increasing its spending on consumer incentives. For the first time this year in June, it overtook Chrysler in offering discounts, according to Autodata. Ford's incentives rose to an average of $3,679 per vehicle in June, up from $3,515 in May.
"On some vehicles like Explorer where many, many new competitors are fighting for market share, we want to be aggressive," Ford spokesman Jim Cain said.
07-07-2004, 05:19 PM
#2
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
GM and Ford to Up Spiffs Today - - Source: The Car Connection
GM and Ford to Up Spiffs Today
Smarting from slow June sales and sweating out a potentially lean summer, General Motors upped its lease deals following the holiday weekend and is expected to jack up rebate cash on slow selling models today as well. Ford is expected to increase its offers as well.
GM has cut lease offers by around $30 per month, sending dealers to their call lists Tuesday trying to lure people who sniffed a new vehicle in June but didn't bite. GM is also revving up another lease pull-ahead program in which it lets customers out of leases early if they re-up with another GM car. Extra cash is coming today, say GM officials.
Already, says Edmunds.com, GM, Ford, and Chrysler hit all-time highs last month for incentive spending. GM was at $4312 per vehicle, while Chrysler was at $3569 and Ford stood at $3328 per vehicle. Imports increased spending too, but they're still well below domestic levels. Chrysler officials said they did not expect to increase deals, as June sales were up five percent and inventories are lower than their cross-town rivals.
Cadillac, says Edmunds, spent the most on spiffs, $6325 per vehicle, followed byLincoln at $5610.
The incentives didn't do much for the domestics in June, with industry sales off six percent, while GM sales off twelve percent and Ford off twelve percent when its Premium Auto Group is counted. And those losses were against a period a year ago in which the U.S. was in the early days of the Iraq occupation.
Among foreign brands posting higher year-over-year results were Toyota Motor Sales USA, American Honda Co., Nissan North America, Hyundai Motor America, Kia Motors America, and BMW.
Inventories of unsold vehicles are at the highest levels in more than a decade, making some Detroit execs a little nervous about clearing lots of 2004 models in time for the '05s.
GM and Ford to Up Spiffs Today
Smarting from slow June sales and sweating out a potentially lean summer, General Motors upped its lease deals following the holiday weekend and is expected to jack up rebate cash on slow selling models today as well. Ford is expected to increase its offers as well.
GM has cut lease offers by around $30 per month, sending dealers to their call lists Tuesday trying to lure people who sniffed a new vehicle in June but didn't bite. GM is also revving up another lease pull-ahead program in which it lets customers out of leases early if they re-up with another GM car. Extra cash is coming today, say GM officials.
Already, says Edmunds.com, GM, Ford, and Chrysler hit all-time highs last month for incentive spending. GM was at $4312 per vehicle, while Chrysler was at $3569 and Ford stood at $3328 per vehicle. Imports increased spending too, but they're still well below domestic levels. Chrysler officials said they did not expect to increase deals, as June sales were up five percent and inventories are lower than their cross-town rivals.
Cadillac, says Edmunds, spent the most on spiffs, $6325 per vehicle, followed byLincoln at $5610.
The incentives didn't do much for the domestics in June, with industry sales off six percent, while GM sales off twelve percent and Ford off twelve percent when its Premium Auto Group is counted. And those losses were against a period a year ago in which the U.S. was in the early days of the Iraq occupation.
Among foreign brands posting higher year-over-year results were Toyota Motor Sales USA, American Honda Co., Nissan North America, Hyundai Motor America, Kia Motors America, and BMW.
Inventories of unsold vehicles are at the highest levels in more than a decade, making some Detroit execs a little nervous about clearing lots of 2004 models in time for the '05s.
07-07-2004, 05:20 PM
#3
Moderator Alumnus
Thread Starter
Join Date: Oct 2000
Location: Washington DC (NOVA)
Age: 52
Posts: 16,399
Likes: 0
Received 8 Likes
on
8 Posts
Incentives Reach Record Level - - By Jack Gilbert - - Source: The Car Connection
Edmunds.com is calling June's industry-wide incentive spending level of $2747 per vehicle a record high. Spending was up nearly ten percent vs. May 2004 levels, with U.S. luxury brands Cadillac and Lincoln leading the way. Caddy alone dished out $6325 in incentive bucks per vehicle. Neither GM's nor Ford's incentive-spending pace could keep them out of the negative column in June's sales results however.
A look at the Big Six's June spending show a major disparity between domestic and import automaker's incentive spending habits. GM, Ford, and Chrysler all spent better than $3000 per vehicle in June, with GM shelling out $4312 followed by Ford's $3328 and Chrysler's $3569. Nissan led the Japanese in spending, shelling out $1550, followed by Toyota's $749 and Honda's relatively minuscule $597.
Among the lowest industry spenders on a brand basis are MINI , spending $41 per vehicle, but seeing sales dip slightly vs. year-ago levels; Scion, spending $101 per vehicle as it rolled out its national sales network; and Porsche, spending $266 while seeing its car sales improve and truck sales flatten out.
GM dealers now tell media that GM will sink even more money into incentives, slashing lease rates by as much as $1500 over the life of the deal.
Edmunds research indicates SUVs were among the biggest incentive hogs in June, needing more than a $2900 incentive to move even as SUVs lose nearly two points of U.S. market share. Minivans, however, are gaining momentum in the sales category, up nearly a point of market share to 7.7 percent. Incentive spending has dropped 4.7 percent as a result to $2678 per vehicle.
Edmunds.com is calling June's industry-wide incentive spending level of $2747 per vehicle a record high. Spending was up nearly ten percent vs. May 2004 levels, with U.S. luxury brands Cadillac and Lincoln leading the way. Caddy alone dished out $6325 in incentive bucks per vehicle. Neither GM's nor Ford's incentive-spending pace could keep them out of the negative column in June's sales results however.
A look at the Big Six's June spending show a major disparity between domestic and import automaker's incentive spending habits. GM, Ford, and Chrysler all spent better than $3000 per vehicle in June, with GM shelling out $4312 followed by Ford's $3328 and Chrysler's $3569. Nissan led the Japanese in spending, shelling out $1550, followed by Toyota's $749 and Honda's relatively minuscule $597.
Among the lowest industry spenders on a brand basis are MINI , spending $41 per vehicle, but seeing sales dip slightly vs. year-ago levels; Scion, spending $101 per vehicle as it rolled out its national sales network; and Porsche, spending $266 while seeing its car sales improve and truck sales flatten out.
GM dealers now tell media that GM will sink even more money into incentives, slashing lease rates by as much as $1500 over the life of the deal.
Edmunds research indicates SUVs were among the biggest incentive hogs in June, needing more than a $2900 incentive to move even as SUVs lose nearly two points of U.S. market share. Minivans, however, are gaining momentum in the sales category, up nearly a point of market share to 7.7 percent. Incentive spending has dropped 4.7 percent as a result to $2678 per vehicle.
Thread
Thread Starter
Forum
Replies
Last Post
kixo
2G TSX (2009-2014)
43
09-25-2015 03:07 PM