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Discussion Starter #1
From the Detroit Free Press:

GM expects sales to pick up soon

Demand, prices on its models rise

June 28, 2006
BY MICHAEL ELLIS

FREE PRESS BUSINESS WRITER

General Motors Corp.'s revival of 0% financing won't be enough to keep the automaker's U.S. vehicle sales in June and July from dropping to "brutal" levels compared with a year ago, when employee discounts sent results soaring, a top GM sales executive said Tuesday.

However, the automaker, which capped its cost-cutting drive Monday by announcing that about 35,000 U.S. hourly workers have agreed to retire or quit, nevertheless sees some good signs on the sales front.

In June last year, GM's U.S. sales soared nearly 50% after the automaker launched its Employee Discount for Everyone program, offering the general public the same prices GM employees pay. GM results were the strongest since September 1986.

This year, GM has eased off incentives and cut vehicle prices, causing sales to drop about 8% during the first five months of the year.

"Our year-over-year comparisons are going to be especially brutal," GM sales chief Mark LaNeve said Tuesday. "June and July aren't going to be a picnic."

Stock prices of GM and other companies in the auto industry fell Tuesday after GM announced its new incentives. GM shares, which have climbed about 28% since the beginning of the year, closed at $25.90, down $1.85, or 6.7%, on the New York Stock Exchange.

Despite the drop in shares Tuesday, several Wall Street analysts raised their earnings estimates for GM on Tuesday after more workers than expected took the automaker's attrition package.

Ford Motor Co. and the Chrysler Group also will post weaker sales in June, said Art Spinella, president of Bandon, Ore.-based CNW Marketing Research.

"The year over year is going to look miserable," he said.

Toyota Motor Co., thanks to strong sales, particularly of its Camry midsize car, might be the only major automaker to post improved results in June, Spinella said.

Automakers are scheduled to report June sales Monday.

Despite the poor results, GM sees growing demand for its new models, such as the Pontiac Solstice, Chevrolet HHR and Saturn Sky, which are selling about as fast as GM can build them.

Consumers also are willing to spend more on GM vehicles. The average price paid for a GM vehicle during the first five months of the year was $26,431, up $1,200. The industry average was a rise of $365 for a price of $25,908.

In addition, GM is no longer fighting news reports about a possible bankruptcy, which hurt sales five or six months ago, LaNeve said.

The focus is beginning to shift from GM's many cost-cutting measures outlined over the past few months -- including the hourly and salaried job cutbacks and the plant closings -- to vehicle sales.

This week, Chrysler, which already offers 0% financing for five years on many of its vehicles, will roll out a new summer incentive program that's expected to revive employee pricing and provide a 30-day money-back guarantee.

Even if Chrysler offers employee discounts, don't expect GM to follow.

"We're not planning on reviving employee pricing," GM's LaNeve said. "I personally don't think it's going to work as well. I think last year was somewhat of a phenomenon, the likes of which we'll never see again."

GM will begin offering 0% financing for up to six years on most of its 2006 models on Thursday, with the sale running through July 5.

"I think GM is hoping that this is the buy-now signal" for consumers, said Mark McCready, director of pricing strategy and market analysis for CarsDirect.com, a Los Angeles-based car-buying and research site.

Ford has been offering a similar deal on most of its 2006 Ford brand vehicles and will stick with its program through the end of July, spokesman Jim Cain said.

Cisco Codina, group vice president of Ford Marketing, Sales and Service, said Ford is going to chart its own course on incentives and is pleased with its incentive program, which started at the beginning of June. Typically, Ford has followed GM incentive programs.

"We, perhaps, may have caught them a bit off guard," he said Tuesday.

Automakers typically add incentives during the summer months in order to clear space before next year's models arrive in the fall and to cut costs of carrying car and truck inventories.
 

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Of course they will, incentives will do that. I do see plenty of new Tahoe's on the road lately though....
 

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Discussion Starter #4
It's a tough market right now. Even Honda with new models is flat saleswise. Only Toyota
is putting up big numbers. Sorry but that new Camry and especially the Avalon are downright ugly to me. For what it's worth Izusu sold less than 1000 vehicles in June.
 

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moparman said:
It's a tough market right now. Even Honda with new models is flat saleswise. Only Toyota
is putting up big numbers. Sorry but that new Camry and especially the Avalon are downright ugly to me. For what it's worth Izusu sold less than 1000 vehicles in June.
Their cars are hideous but old people seem to love them. Notice on the road anytime you are stuck behind an incredibly slow car 99% of the time it's an old fart in a Toyota.
 

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moparman said:
Yep it was bad enough with the Buick's. Now we have another slow folks mobiles.
Oh BOY! Someone else who's noticed the slowest people are driving Buicks. ON that subject temporarily here are my top slow-mobiles:
1. Buicks - especially white ones, or low-line 4 door sedans.
2. Ford Escorts, for some reason.
3. 1st gen Chrysler minivans, especially with rust and 'wood paneling'
I hope I live long enough to become a menace on the roads, driving too slowly because I only have 30 minutes to make the 4 mile trip to eat lunch at the K-Mart cafeteria.....
 
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