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According to Automotive News, some analysts are accusing General Motors of sliding back into bad habits by boosting sales with heavy incentives. The report says that GM's 22-percent sales jump in January was largely fueled by laying piles of cash on the hood. On average, GM handed out $3,762 per vehicle last month – the highest incentive figure of any of the six largest automakers. That number represents a 29-percent increase over the same month last year, and Edmunds.com analysts are concerned that the automaker has begun pushing too many models on dealers with plans to move them with incentives.
GM, meanwhile, says that while the company did institute a "modest" increase in incentives last month, it doesn't plan on falling back into the rut of driving production with the cash. The company saw Chevrolet sales jump 19 percent, while Buick and GMC enjoyed a 32-percent increase, all of which were driven largely by more free-flowing consumer credit.

[Source: Automotive News – sub. req.]


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  • 43 Comments
      • 4 Years Ago
      if incentives reach levels of 3K why not just drop the base price of certain models and undercut the competition...it works for everyone else...
      • 4 Years Ago
      Didn't an article earlier state they built 40k Cruze and sold only 18k....that sounds like a "push" to me. In fact it will be a giveaway when Focus and Civic and Corolla comes out and even now with the Elantra assuredly increasing production.
      • 4 Years Ago
      Its all about putting more asses in your seats of the better products you are building today.
      If those asses like their seats they will buy new ones from you when theirs wears out.
      • 4 Years Ago
      I went shopping for a new car today, and was looking at a 2011 Ford Fusion Sport, it stickered at $28,650, and the dealer said I could get $5750 of the sticker and get it for $22,900. GM isn't the only one giving incentives and rebates to move cars.
        • 4 Years Ago
        And where in the article do you read 'GM is the only one to give incentives'?
      • 4 Years Ago
      Fewer dealers will sell more cars and trucks with less incentive money. How is that plan working out?
      • 4 Years Ago
      Why should GM care? The Obama regime bailed them out with OUR (US taxpayers) money.
      • 4 Years Ago
      Meanwhile Ford stock continues to hover below $16 per share. GM is at nearly $37 per share. So much for all that good juju Ford gets online.
        • 4 Years Ago
        TriShield as clueless as always
        • 4 Years Ago
        Wow, that must hurt!
        • 4 Years Ago
        Thanks to the bailout, GM has a better debt ratio, and better cost fundamentals.
      • 4 Years Ago
      I for one don't care, as long as they are making more money. GM's problem like the other two American car companies was lack of quality products and ridiculous overhead. Incentives don't make or break a car company, undiversified and s*itty products do.
      • 4 Years Ago
      The arrogance never left GM. Chrysler has learned and Ford is the bench mark. GM is the most insincere company on the planet, its values and beliefs are self centered – the Chevy Cruze Vs Hyundi spot proves the point. The proof will be in GM’s declining stock values.
        • 4 Years Ago
        Since I've been secretly pulling a bit for GM I guess what I find the most disheartening is that their response to the news/accusation is the same as it has always been "yes, we're using more incentive money but we promise it's only short-term...blah, blah, blah". When will they get it? And when will the journalists ask the very obligatory question that hangs out there "but you've said this every time this comes up and you are all known liars so why is this time different...what is the real plan to wean yourself from incentives?" GM and the country as a whole are so short-sighted and can't think about anything long-term that they'll destroy themselves again. I mean, isn't that what the IPO was about...short-term decision making for "shareholder value" that will ultimately doom the company over the long-term? Yes, I'm being cynical and sarcastic at the same time as I believe I'm telling the truth.
      • 4 Years Ago
      The cruze vs Hyundai spot is to show value....if you can't understand general marketing 101 then you have issues....gm's sales were boosted by momentum and gm card earnings being topped off or rounded up. Gm also has more than the regal and cruze...the silverado (a 5th model year) mind you still is a strong selling vehicle, the equinox and terrain you can't keep on a lot...then there are the srx and CTS...let's not forget the acadia traverse and enclave...oh and what about the camaro? Might want to do some research before your mouth makes claims that facts can't cash
        • 4 Years Ago
        No, it is all about marketing. I just saw a new Accent on the road for the very first time last week. It's barely on sale. Why compare their car to something that no one is familiar with yet? Wouldn't Hyundai love that, seeing GM pay money to plaster Hyundai's new car on the TV. From a marketing standpoint, it's logical to compare the Cruze to a model that consumers are somewhat familiar with.

        Sure, to auto enthusiasts, it looks dishonest, since we all know there is a new Accent NOW. But does the general buying public know that? Probably not. And car commercials are not aimed at the enthusiasts that frequent car blogs, they are aimed at the general population.
      • 4 Years Ago
      Akerson is the first GM CEO in years who gets it. As he explained during a meeting, GM sells consumer products, just as Coca-Cola does. Except its consumer products cost 30K, rather than Coca-Cola charging $1 for a can of Diet Coke.

      Remember that when Akerson ran Nextel, he was intrigued by "push to talk." How many Nextel phone have you heard with the "push to talk" chirp?

      By the way, I was watching Motor Week on PBS this morning. They tested 9 CUVs at $29K or less. The Equinox won. When was the last time a GM vehicle won a comparison test that didn't involve the CTS?
        • 4 Years Ago
        Regardless of who sponsored what, those Chevies were favored by a landslide.

        GM sent their best out, to be compared with the market leaders, and were found highly-competitive and the overall favorite by the target market

        That's a solid result.
        • 4 Years Ago
        You do know those ads on HGTV were paid for by GM and the spots they used were only does that had a favorable review of the GM product. It is in the footnotes.
        • 4 Years Ago
        Kent,

        The "car is just a consumer product" is what got GM in trouble last time. Remeber when they brought in Ron Zarrella from Bausch & Lomb to run GM North America? What a total failure.

        Akerson, like Whittaker, came from marketing companies, not product companies. Cell phone companies don't make cell phones they market you a service and let other companies do the product development. Likewise, today Coca-Cola is a marketing company, and is no longer a product company. The last time Coke tried to improve their core product we got New Coke. Today Coke is mostly focused on marketing, getting you buy the same old product you've purchased for decades.

        The automotive industry always have and always will focus on product. If you study history you will find that almost without exception that successful automotive executives have engineering backgrounds. This includes Henry Ford, Alfred Sloan, Walter Chrysler, Soichiro Honda, Ed Cole, Lee Iacocca, Eiji Toyoda, Shoichiro Toyoda, Carlos Ghosn, Dieter Zetsche, Takeo Fukui, and Alan Mulally.

        Almost all of the industry failures have been under finance/accounting people like Akerson; guys like Roger Smith, Bob Nardelli, Rick Wagoner, and ousted Toyota CEO Katsuaki Watanabe.

        BTW: Its been years since I've seen a Nextel phone. Push-to-talk was not enough for Nextel to thrive in an industry where new phone features are added every month.
        • 4 Years Ago
        GM sent a basket of Chevies against Toyota & Honda for some HGTV thing. The women liked the Traverse & Equinox, and were OK with the Malibu. Which is why the Traverse and Equinox sell like crazy.
      • 4 Years Ago
      Other then the cruze and regal what all does new gm have thats desirable that old gm didnt have? Good sales start with good products. Old GM had the vette, camero, and silverado but its not like you can build a car company on that alone and it wasent enough to save them.
        • 4 Years Ago
        ...except for the (Opel) Regal, ... zzzzzzzzzzzzzzzzzzz,etcetcetc
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