Summer shaping up to be difficult for domestics
As Toyota and Honda called in record numbers for June sales, auto dealers pushing domestics are looking to corporate to lay some incentives down to get them through the summer, according to a survey of dealers conducted by Automotive News. Instead, automakers are laying down more vehicles to store massive production overrun. While Chrysler has rolled out employee pricing and zero percent financing, Ford and General Motors haven't yet opened up the flood gates on incentives, and dealers are already hurting. What's more is that dealers of domestics are also begging for more small cars, while automakers need them to sell more profit-fetching SUVs.
On the flip side, imports wish they could get more inventory. Toyota and Honda dealers are asking more cars and don't have any special interest in incentives -- their cars are moving.
[Source: Automotive News via AutoWeek]
Reader Comments (Page 1 of 2)
Vinny 5:12PM (7/05/2006)
Should file this under Typical Day Of Business.
"Toyota and Honda dealers are asking more cars and don't have any special interest in incentives -- their cars are moving."
Might as well report that the sun came up today.
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Michael Karesh 5:19PM (7/05/2006)
GM's current sale ends at close of business today. It'll be interesting to see what they roll out tomorrow.
Many other manufacturers' incentives also end today.
I'll have the new ones in my database within a day or two of their release, if not the day they're released.
http://www.truedelta.com
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Carlton 5:41PM (7/05/2006)
Ho Hum. Let's see, GM and Ford can't sell much of anything beyond pickups and SUV's-vehicles which aren't selling well at all right now because of fuel prices.
Toyota and Honda need inventory because they sell everything they have.
Ford and GM dealers are begging for more small cars. Ford and GM keep pushing pickups and SUVs on them.
Toyota and Honda need inventory because they sell everything they have.
Ford and GM both have serious financial issues.
Toyota and Honda are reaping profits.
Ford and GM have a reputation for mediocre quality and lackluster design.
Toyota and Honda have reputations for excellent quality and solid, quality designs. Toyota may be a bit boring, but Toyota buyers seem to like the idea of a reliable appliance.
Maybe if Ford and GM actually produced products that savvy consumers wanted perhaps they could actually sell some. They could learn a few things from Toyota and Honda.
But I doubt they ever will.
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GhostDoggy 5:59PM (7/05/2006)
I caught a commercial yesterday for 0% financing on the Tundra double-cab for 60-months. Why should they offer this if the domestics are hurting so badly? My guess is they are readying themselves for the new Tundra. Still, 60-month zero financing is tempting. I could get $8K dealer trade-in on my current truck. Still, I do not really need a truck anymore.
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Paul 6:02PM (7/05/2006)
it a surprise that they continue to sell even one car. Toyota and Honda make smart well designed cars when the domestics make large stupid poorly outdated designed ones. GM will be better off being owned by the French government along with Renault and Nissan.
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Michael Karesh 6:12PM (7/05/2006)
Both Honda and Toyota place incentives, sometimes large ones, on their vehicles. These are generally smaller than those on domestic cars, but aren't trivial. For example, there's a $2,000 rebate on the Sequoia.
Make no mistake about it, Toyota is using price as well as product to sell cars. Their dealers enjoy larger than average margins, and in my experience will sell most models near invoice. So discounts can be large.
Honda prefers dealer cash to rebates, so its incentives are less obvious.
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iQuack 6:31PM (7/05/2006)
GM and Ford are primarily truck makers more than car makers. Neither company offers competitive "crossover" or other vehicles that are as good as those from Japanese companies, so slow sales for GM and Ford are no surprise.
It was about a year ago that GM and Ford were offering employee discounts and other incentives, so sales were inordinately high then.
Only a sharp drop in the gasoline price can help GM and Ford whose truck/SUV sales might recover.
GM and Ford offer the wrong products at the wrong time.
Yes, there's the Ford Fusion and its derivatives as well as a few good GM cars, but they are weak competitors to Toyota and Honda.
High gas prices and weak car lines will continue to negatively affect GM and Ford. The best they can do in the short run is to reduce their costs and gain some relief from the choke-hold that the UAW has on them.
The best news is that as GM and Ford sink lower and lower, the UAW will sink along with them.
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Ed 6:34PM (7/05/2006)
Did GM think that it was going to keep selling Tahoes at a great pace? Every idiot who would buy a Tahoe in this day bought one within 2 months of the new model's release. The little sales bump they got from the new full sized SUVs was ephemeral. Everyone on Earth (except for Bob Lutz) already figured that out.
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steve 6:39PM (7/05/2006)
cry me a river. If it werent for working families that are getting hurt by this i wouldnt care one bit. I am so sick of seeing behemoth 15 mpg pigs. Let's see no r and d funding, focus on short term profit, focus on lining the pockets of fat smelly executives- no wonder gm sucks so bad. Oh let's see i'd like a small sport sedan with 275 hp and an awd option--where's gm? sorry, but we can sell you a 5 ton suburban. Sooner they die the better.
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Ed 6:39PM (7/05/2006)
Quack, you slay me. You go on for a couple paragraphs about how GM/Ford's products blow, but in the end somehow it's all the UAW's fault. Maybe it's the liberal media's fault too.
Still waiting for an explanation from any of you right-wing fanatics as to why GM made the worst products it has ever made during the 70s and 80s (when they were swimming in cash) but they're now making the best products they've ever made despite being "crushed" by legacy costs and the UAW. Hmmmm....doesn't make much sense that it's all the unions' fault. But then again, maybe I just don't read enough Ann Coulter to understand such a brilliant argument.
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Bob Miller 6:56PM (7/05/2006)
In Houston I see incentives for Toyotas on TV all the time - mainly trucks and SUVs. Trucks and SUVs are down for everyone, it's just that it's easier for the media to target GM and Ford because they sell more of them than the imports.
Sales at GM for June were actually higher than they were for May, but that news doesn't sound as dire as the "June sales are off 27% (or whatever it was) compared to last June" headlines, so people aren't as apt to read the story or buy the magazines.
Small cars are selling well at Toyota and Honda, sure, but they're also selling well at GM. The Cobalt, Aveo and G6 are all selling better than they did in May according to GM. And I've also heard that the Dodge Caliber is selling pretty well too.
So, read into all of the headlines what you will, but the bottom line is this: trucks and SUVs are off for all the car companies, including the Japanese. Small cars are hot for all of the car companies, including the Americans.
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gbh 7:00PM (7/05/2006)
It's only the UAW's fault insofar as they cost an average of $81 an hour (pay and benes) to employ. Which is just a skosh (sarcasm by the 55 gal. drum) on the high-side for totally unskilled labor that involves about zero risk of death. This is not a skilled trade (plumber,electrician) or skilled with a good chance of death (linesman,ironworker).
That being said they are not all bad. They do end up taking the rap for product that was not designed correctly, or was made so cheaply that it could never be assembled the way it should be. That is not their fault. The incompetant managers (bottom to top) who don't listen to feedback from the actual workers are completely to blame. Bad corporate culture gets bad results.
Reality of it is- it's boring, but requires less skillset than working at McDonalds. The archane work rules must go, and only the creme of the crop should keep their jobs. The UAW has proved that it can kinda be competitive when it's members actually understand that they lead the life of Riley, and they better start doing something to earn that ridiculously large check they get. Let alone the gold-plated benes.
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glacia00 7:09PM (7/05/2006)
Oddly enough this might be what convinces me to buy a US car. I have 25 years of buying US cars and have waited desperately for US automakers to pull their heads out of places I won't speculate.
Since they don't seem headed in that direction I had pretty much accepted I will never buy another US car. But if I have to wait 2 months or more for a foreign car and a US car dealer has something on the lot that would be a second or even third choice it might change my mind.
I'm not a car nut like most people here my decisions come more from practicality than a love affair with inanimate objects. The idea of a 'dream car' is as alien to me as a 'dream blender' so I don't expect many here will identify with not wanting to wait. But it could be a factor for some.
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Bob Miller 7:25PM (7/05/2006)
My Dad used to work for GM in the 70s and 80s and then as a quasi-consultant/auditor in the late 90s early 00s. He told me that GM used to force a lot of garbage down the dealer's throats - and in the early 2000s that was trucks. I'm sure that the Domestic dealers are selling cars just fine, but are sitting on a huge inventory of trucks and suvs, which probably really sucks.
All I know is this, unless I absolutely NEED a pickup truck, it will take a huge discount off the msrp to get me into one with $3/gal. gas.
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Michael Karesh 7:27PM (7/05/2006)
There's a ready supply of most Hondas and Toyotas. Hence the incentives.
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iQuack 7:53PM (7/05/2006)
9. "Quack, you slay me. You go on for a couple paragraphs about how GM/Ford's products blow, but in the end somehow it's all the UAW's fault. Maybe it's the liberal media's fault too."
-----------------------------------
I didn't say GM/Ford products blow; however, I did imply that GM/Ford cars suck. Sucking vs blowing is the distinction here.
With respect to GM and Ford managements during the '70s and '80s (as well as now, for that matter), there's no question that they both sucked and/or blew depending on which is considered worse. They made stupid deals with the devil (UAW) but with UAW's guns held to their heads for fear of strikes. The UAW shares much of the blame for GM's/Ford's troubles now because GM/Ford can't afford to keep promises made under duress. Best unions are weak unions!
GM and Ford do make good trucks and SUVs--too bad that's not what people want to gas up these days at $3 or more per gallon.
Not aware of what kind of car Ann Coulter drives, but I did hear that she lines the bottom of her pet parakeet's cage with "The New York Times."
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if by imports you mean Honda and Toyota... 8:04PM (7/05/2006)
Because Acura had a large sales drop and Nissan had a very large one.
I don't know quite which side I'm agreeing with here, but IMHO GM made horrible products in the 80s and early 90s because they could. They were getting trade protectionism from the government, and so they didn't bother competing with foreign cars. And they didn't seem to set the bar very high for each other either.
Lack of competition allowed them to produce awful cars and still sell them, so they did, at least until it didn't work anymore. Then they were so far behind they couldn't compete.
GM makes some good crossover vehicles, Honda makes none. That is unless you count the CR-V, which gets bigger (more truck-like) each time they revise it, or the disatrous Ridgeline, which carries loads like a car (El Camino) and gets gas mileage like a truck.
While the imports are racing to make bigger and bigger trucks (look at Toyotas 40% SUV lineup and new huge "small truck"), GM has been making crossover vehicles, and getting quite good at it. DCX outdid them and made a flat-out badass wagon! This particular complaint towards the domestics makes little sense to me.
I don't think GM is counting on SUV sales remaining huge. Do you forget the stories a year ago of them warning on future profits because they said that new SUV sales would be slow?
Just looked for the article, autoblog's search sucks. No search including "GM" prunes more than 1/4 of the articles from the list.
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Mal Fuller 8:06PM (7/05/2006)
Here in New England, Toyota's Summer Sales Event television ads ("Let's Go For a Ride!") are only occasionally interrupted by regular television programs. Toyota just doesn't sit there and wait for sales to happen! Detroit's malaise has more to do with poor marketing than poor products.
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whofan 9:47PM (7/05/2006)
I still see a lot of the terrible 80`s/90`s GM vehicles on the road yet.
I just talked to a neighbor of mine who just got rid of his 87 Oldsmobile Delta 88. It had the 3800 v6 with 178000 miles on it. he said he only did routine maintenence to it.
The car is still running in fair shape living it`s life in salty Michigan winters.
Ido agree GM built some junk in it`s day. I think the worse cars were in the 73-86 years.
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skaz 1:24AM (7/06/2006)
Honestly, in the way of reliability of American cars in the 70s-80s, almost anything with a V8 is superbly solid. I've got a Mercury (73) and a Chevrolet (75) and both are absolutely bomb-proof. They flopped on 4-bangers and they're still mostly garbage.
Even the V6s and I6s of the 70s/80s were fine. And what speaks of quality and reliability? Almost any engine is reliable as long as it's maintained and not driven like a hi-po engine when it's a 110 HP commuter engine. If you're coming down to build quality then Americans are just as good as anything else, except for GM failing on interiors. The interior plastics often aren't as good as the imports, but the cars tend to be cheaper priced, too.
Quality speaks for itself over the years. My 30+ year-old relics speak well for the durability of American vehicles.
Sure, Vegas rusted. So did Accords, both VERY badly. But I see Vegas still today -- albeit rarely, but I've never seen, in-life, a running 70s Honda.
It's different now, I know. But GM drivetrains are still pretty much invincible, just as much as a Toyota. I've owned Toyotas, BMWs, Nissans, Chevrolets, Fords, I'm obviously not picky. If you treat the car right, it treats you right.
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