GM follows last month's gains with new incentives on trucks and SUVs
GM has bucked the domestic trend of consistently giving up market share to Japanese automakers for the past couple months, and with a new round of incentives, the General is hoping to keep the trend going. The Silverado and GMC Envoy are among the vehicles receiving an additional $1,000 in rebates during the entire month of October. GM is using targeted incentives on trucks and SUVs, but the incentives don't apply universally throughout the lineup.
Although GM's sales improved year over year in September, incentives were actually down $240 vs. August, to an average of $3,089 per vehicle. That's still $800 more than the industry average, but better than GM's incentive spending in years past. With GM's market share stabilizing, incentives closer to industry average, a competitive labor contract, and some interesting products in the pipeline, GM may have turned the barge faster than we expected.
[Source: Bloomberg]
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Reader Comments (Page 1 of 1)
Owen 11:40AM (10/04/2007)
Does anyone beside me think that the guys over at TTAC may be feeling a little sheepish right now, with their overhyped, GM Deathwatch?
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Avinash machado 11:44AM (10/04/2007)
Perhaps it is time for the Farago's days of journalism deathwatch.
willem 11:49AM (10/04/2007)
"Sheepish" doesn't even begin to describe those treacherous bastards.
Yankee 12:04PM (10/04/2007)
"The Silverado and GMC Envoy are among the vehicles receiving an additional $1,000 in rebates during the entire month of October."
I'm guessing you meant GMC Sierra, not the Envoy...
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Allen George 12:21PM (10/04/2007)
I wouldn't be so fast to count GM out of the woods yet. They've still got a lot of rationalizing to do across their lineup, perceptions to change across a huge swath of customers, consistent reliability gains to implement (this requires long-term changes in engineering and manufacturing processes and decisions) as well as more exciting designs to bring out...
I also think that the effect of the labour contract's a bit of an unknown right now. How much it'll reduce costs and if that'll translate to better engineering and designs is to be seen.
I like a lot of GM's new designs, but I don't think they're a 'healthy' company yet.
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henrykrinkle 12:39PM (10/04/2007)
"That's still $800 more than the industry average, but better than GM's incentive spending in years past."
Yes but as said, still $800 more than industry average.
"With GM's market share stabilizing..."
Yes but drastically lower than historically.
"...a competitive labor contract..."
Competitive? The jobs bank still exists. Competitive would mean no UAW.
"...and some interesting products in the pipeline...
True, but that sure is a long pipeline. How long have we been hearing about the Camaro? And how much longer will we hear about the Volt before someone actually gets to buy one, if ever? By the time some of these products squirt out of that pipeline, they're irrelevent. GM already stopped comparing the Malibu to the competition as soon as the new Accord came out.
"GM may have turned the barge faster than we expected."
Turned? Maybe slowed. A positive month doesn't save a company. Even more troubled Ford posted a profit recently. Not a domestic hater, just hate blowing with current breeze of the moment. Had a good month? Good for you. Sustainable? Check back in a few years.
And yeah, TTAC does suck.
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Ted Kennedy Is My Chauffer 1:01PM (10/04/2007)
GM has made quite a bit of progress, as they have been reporting good news since Q4 of '06. They will never achieve the marketshare they once had, as it is now impossible for any manufacturer to own that much of the market, as the number of companies competing is far greater than it used to be. That said, you can't compare marketshare 1957 with marketshare 2007. That would be like comparing pre-cable / dish TV ratings to those of today. Consumers have far more choices and are taking advantage of them- as they should.
GM is still saddled with $800 more in costs per vehicle than import brands, but it is a far cry from the $4,000 difference they had 25 years ago. It's going to take time to gain parity, if it is even possible.
The UAW is not going away, so GM can never escape it. It remains to be seen what happens with Toyota's labor force, given Toyota's goal of reducing US labor costs.
The Camaro is right on schedule from when GM said it would hit the market and seeing as the UAW contract states the production location and timeline of the Volt, it's pretty safe to say that it is a 'go' as well.
GM didn't get into this situation overnight and it is not going to recover overnight, either, They have, however, made more progress in a shorter period of time than some are willing to admit.
Business Week ran a cover story two and a half years ago stating that the GM plan wouldn't work. Based on their expert opinion, GM should pretty much be gone by now instead of enjoying increased sales and turning a profit as they have been reporting.
henrykrinkle 2:55PM (10/04/2007)
Ted K:
That's why I said check back in a few years. Any success GM has will be met with new demands from the UAW in future contracts. If profits start rolling in as optimists expect, management won't have the fortitude to stick to their guns and not give back a lot of what they took away this time. And then the labor cost cycle starts all over again. The fact that they couldn't banish the ridiculous jobs bank in this time of crisis says it all.
The Camaro may be on schedule but how late to the game is it? Poor, dilapidated Ford has been making money on the Mustang all along. By the time the Volt comes out, Toyota will have had some 15+ years of experience with alternative powertrains and battery usage.
Yes, progress has been made and people are excited about the new models but there's always excitement about new models as long as they're not total junk and GM has definitely improved there. But since GM mortgaged the farm to bring so much new stuff to market, what happens when the luster wears off? Where's the money going to come from to re-vamp all these models that stop drawing buyers like they do now? From profits? Hopefully, but profits are limited when you have to give it back on rebates.
I only commented on this because I found it funny that an article about GM increasing rebates ends with such optimism.
Dave 12:52PM (10/04/2007)
It seems that the health care portion of the UAW contract ensures the unions existence in perpetuity, for better or worse.
GM has more interesting vehicles than any other manufacturer, worldwide, bar none. (Not that they have the highest percentage of interesting vehicles.)
So far so good.
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SPG 4:19PM (10/04/2007)
Glad to see GM's doing good.
They employ too many people to let themselves die.
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