Promises for fire-sale-free year might be broken
Consumer confidence is slowing down, as are vehicle sales if the month of May was any indication. A storm is brewing... one that might just result in a reversal of certain promises made by Ford, General Motors and Chrysler to the effect of, "read our lips, no big rebates."
Analysts are predicting that the environment is such that the Big Three will have no choice but to institute new rebates of epic proportions to move the cars stacking up in the reserves and to give sales a jolt. And this time around, Ford will be the one that starts the party with the $4,000 it recently slapped on the hoods of some of its models.
The move could put the industry back in a desperate position, where dealers are making very slim margins and automakers are losing thousands of dollars per sale.
[Source: Reuters via Automotive News]
Reader Comments (Page 1 of 3)
AutoFan 7:01PM (6/10/2006)
Wow. It's like a heroin addiction or something.
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Jason 7:10PM (6/10/2006)
C'mon folks, let's be logical about this (although logic is apparently an alien concept to domestic automakers).
Stopping huge rebates isn't something they can do overnight and honestly may never be able to get away from cash incentives. They sold a lot of cars last year and I think they're beginning to feel the brunt of all those. The market for potential GM/Ford vehicles may be oversatured at the moment.
Still it's shocking that consumers don't want to buy a Chevy Cobalt or Ford Explorer at MSRP or very close. lol
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Bob Miller 7:15PM (6/10/2006)
Actually it is kind of shocking that the Cobalt isn't being bought near MSRP (if that is indeed true), considering the fact that gas prices are high and the car is pretty cheap to begin with. I can understand the Explorer not selling though.
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Gardiner Westbound 7:31PM (6/10/2006)
Why would this be a surprise? GM, Ford and Chrysler's products are neither more desirable nor reliable than last year. Nor will they be next year.
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Rastus 7:32PM (6/10/2006)
It's no surprise whatsoever! Who with a lick of sense would buy a GM POS? Hell, you I'll Give you mine...you come pick it up. If you can drive it away, even more power to ya.
GM cars are truely rock bottom- they are disposable, right up there with those cheap razorblades and diapers.
The only people making money off GM cars/trucks are the junkyards.
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Gardiner Westbound 7:35PM (6/10/2006)
Why is this a surprise? GM, Ford and Chrysler's products are neither more desirable nor reliable than last year. Nor will they be next year.
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D 9:02PM (6/10/2006)
They should be focusing on selling a quality product people actually WANT. Not trying to suck people in with wide-eyed rebates.
Ford or GM just wont learn will they. One "good" car (Corvette, Mustang) wont save a company. I can throw a dart at a board covered in every new car offered by Honda, Mazda, Subaru, Toyota and I would be happy with whatever I get. Do the same with Ford and GM and the odds are I will be disapointed with some fleet car peice of junk.
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Lithous 9:25PM (6/10/2006)
"GM, Ford and Chrysler's products are neither more desirable nor reliable than last year. Nor will they be next year."
Yes I agree, it is hard to sell 4.4 million vehicles in the U.S. and be any more reliable than GM. Toyota is finding that out at only 2.2 million sold in the U.S. Sarcasim aside, GM is definitely getting more and more reliable and will sell more cars than Toyota in the U.S. again this year.
The rest of the world has increases in GM sales and profits and the rest of the world is advancing their test scores. In the U.S. test scores are going down and so are GM's sales numbers and profits. Look at when Jay Leno does "Jay Walking". Americans don't even know who George Washington is anymore, how are they supposed to understand whether one car is as good as another? They don't, they just buy what they are told is good. Speaking of George Washington, there was a special on him on the History Channel and showed how he lost many battles very badly. I'm not ready to give up on the American auto manufacturers yet, nothing is perfect and nothing can always be a winner. But that's just me.
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Lithous 9:45PM (6/10/2006)
"One "good" car (Corvette, Mustang) wont save a company."
Because the following are just POS: 2007 Tahoe, Solstice, G6 Convertible hardtop (for less than the Solara regular old cloth top), Sky, Aura, Outlook, VUE (with a better interior than a CRV and a hybrid coming out in a few months), Lucerne, CTS, STS. Including the Corvette that makes 11 vehicles (with more coming out like the Enclave) that is superior in workmanship than 9 out of 10 Americans can produce. All world class and/or bang for the buck vehicles.
And quality? iPods that won't turn off, have screen problems and battery problems and guess what, 14 million will probably sell in quarter 4 of 2006. All the cars I mentioned are better quality than an over hyped iPod and didn't have to use Chinese slave labor.
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TheFatman 9:45PM (6/10/2006)
Why don't they go ahead and offer the 10y/100000m warranty instead of the rebates?
The arguement I keep hearing, from domestics, is that our products are just as reliable if not better than our foreign counterparts. Why not follow the Koreans that had the same problems facing domestics, that they build crap quality, and put their money where their mouth is, rather than putting it into rebates?
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naggs 9:53PM (6/10/2006)
american companies need a 10y warranty to win back customers
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Carlton 10:24PM (6/10/2006)
Imagine that. Ford and GM have to throw money at customers in order to get them to purchase their products. And now they are going to break a "promise". Surprise surprise.
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Slate 10:25PM (6/10/2006)
I am in the market for a new vehicle. I went to the Ford dealer today and test drive the 06 Explorer and 06 Montego AWD. Many to chose from on the lot. I am not impressed with the vehicles. I visit 2 Toyota dealers to look at the 07 Camry XLE V6 and there are zero in stock. These cars are flying off the lot with no incentives or special financing. The Toyota interiors are 100x better. GM and Ford has to realize that their crap interiors are killing them and they will never improve sales until they realize this. They have made improvements with the Tahoe and what appears to be the new Saturns but they have a long way to go to catch Honda and Toyota.
Ford giving 0% financing plus alot of cash off still can't get me to buy one. If GM dropped prices to match Ford, I may be tempted but I refuse to touch a GM product without heavy incentives. It would take alot to make me look the other way into a GM vehicle.
I agree...A 5year warranty to match Hyundai would be a major confidance booster for consumers
GM give me 0% and cash back or sink with Ford!
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Leo 10:44PM (6/10/2006)
This is why even Americans are rooting for the poorly-run "Big Two" to fall flat on their faces and wind up behind Toyota. Toyota does things right , and in this country if you do things right you win.
GM and Ford are castrating the entire industry while they can't manage their way out of a wet paper bag. LOSERS!
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bernie 10:47PM (6/10/2006)
Leave it to lithious to screw up an iPod! LOL
In what drug induced haze did the Saturn Vue's interior get better than the Honda's lithious? The Vue has had the cheapest interior on the planet since its introduction.
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Andrew 11:13PM (6/10/2006)
slate:
You said you looked at Ford Explorers and Toyota Camry. They seem like very different cars - shouldn't you be looking at a Ford 500 or Fusion? Or if your goal is wasting gas a Sequoia? Just curious.
To all those complaining about product, it don't matter. Takes years to cycle new product, but cars are building up now. Supply and demand. Gotta either cut production or drop price (which is all a rebate really is)
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Slate 11:28PM (6/10/2006)
Well I am still undecided between a sedan or mid sized SUV so I am keeping my options open. The Fusion did look good on the outside but once again FORD messed up the interior with lots of plastic and cheap looking parts. I have no problem with plastic but it has to be done well. I think everyone knows that FORD/GM has the ability to produce a fine vehicle but it boggles my mind that they still produce crap and expect the consumer to open up wide and eat it!
GM can say it will never go back to the days of deep incentives but the bottom line is they are not moving cars and the US customer has lost faith in their products. They have to regain faith or they will continue to lose marketshare
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Dave 2:09AM (6/11/2006)
The rebates are probally cheaper for GM to endure.
If they offer a 10 yr warranty like Hyuandai, GM is going to suffer a big lost on repair costs
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Rastus 2:10AM (6/11/2006)
I hate to say this Lithous, but you know what?...you strike me as an idiot.
Between the comparison of an automobile (the secondmost expensive a purchase most people make)...to an ipod, or All Temperature Cheer (yes, I saw your comparison of laundry soaps earlier too)....I swear to God, where do you dream this shit up?
Now people, listen up!! You know, most people would shop for a Chevy the same way they would a Chia Pet. If the TV advertisement sounds good, then that's what they go for. And if there is a cute little jinge which has a catchy tune...even better!!!
Don't you see??? An off-the-cuff purchase of a jug of soap is NOT THE SAME F"N THING as 5 years of MONTHLY PAYMENTS!!
Do most people LIKE THIS KIND OF FINANCIAL SLAVERY???
NO!!!! So you can bet your sweet ass they will buy whatever the HELL SUITS THEM BEST!!!
Just wait until this summer Lithous, maybe it will finally dawn on you (no, not the Dawn dishsoap) that people really DO want the BEST for their money!!
22.5% and falling...that is your beloved GM's marketshare. Down from over 50% in the 1960's.
As Arsenio Hall once said: "HMMMMMMMMM".
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Silver 2:26AM (6/11/2006)
Wow, in Lithous' parallel universe, domestic cars are top-notch and iPods are junk. Lithous, are you from Htrae (AKA "Bizarro World")? Methinks yes.
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