GM Sales Soar on Employee Discount Offer

[MikeMike]

http://biz.yahoo.com/ap/050701/auto_sales.html?.v=6

General Motors Sales Rise 41 Percent on Employee Discount Offer; Ford's Domestic Sales Drop

DETROIT (AP) -- General Motors Corp.'s sales soared 41 percent in June to its highest monthly total in nearly 19 years thanks to a heavily promoted discount that allowed customers to buy cars and trucks at the employee rate, new sales figures show.

Japanese brands also maintained their strong U.S. business. Toyota Motor Corp. and Nissan Motor Co., which have spearheaded the Asian surge this year, both reported their best June sales periods ever in the United States.

But Ford Motor Co.'s domestic business fell again.

GM, the world's biggest automaker, said June amounted to its best month since September 1986. The boom was driven by record truck sales, which increased 69 percent. The Chevrolet Silverado full-size pickup led the industry as its sales more than doubled, GM said.

"We see this as an indication that America's desire for trucks and SUVs is still a strong force in the marketplace," GM vice president of marketing Mark LaNeve said.

GM sales for the first six months of the year rose 2.7 percent. Its truck sales rose 6.3 percent; car sales fell 2.3 percent.

GM included all vehicles in the discount plan except the Chevrolet Corvette and GMC medium-duty trucks. The discount, scheduled to run through Tuesday, saves buyers about 3 percent to 4 percent off the dealer invoice price.

Ford, which has declined to match GM's offer, said its domestic sales fell 2.5 percent in June from a year ago and dropped 4.3 percent for the first six months of the year despite hits like the sporty Mustang and growing sales of its crossover vehicles.

The nation's second-biggest automaker said June sales of the Ford, Lincoln and Mercury brand cars rose 7.7 percent, helped by the Mustang and Ford Five Hundred sedan, but truck sales fell 7.3 percent.

Ford's top sales analyst George Pipas said Friday that Ford considered matching GM at the beginning of June but decided to stick with its sales strategy. Ford began offering $1,000 last month to employees who persuaded friends and relatives to buy a Ford. That deal runs through Sept. 30.

Pipas acknowledged GM's program as a huge success but said attracting buyers after the promotion will be more difficult.

"The interesting thing about a clear, compelling message is that it's a clear, compelling message," Pipas said. "Customers know when it's on and when it's off."

Pipas said he believes GM's discount is an attempt to clear out 2005 inventory before the fall and won't escalate into a pricing war between the automakers.

Toyota reported its best-ever June on a 10 percent sales increase. Toyota's total sales are up 11.6 percent for the year on the strength of car sales, which have jumped 20.1 percent.

"Our fuel-efficient strategy continues to pay dividends," Toyota Motor Sales USA president and chief operating officer Jim Press said.

Nissan also announced its best June ever, with an increase of 14.2 percent. Nissan's year-to-date sales are up 15.5 percent on the strength of its trucks.

Sales percentages are adjusted for differences in the number of selling days. There were 26 selling days in June 2005 and 25 in June 2004.

GM shares rose 76 cents to $34.76 in afternoon trading on the New York Stock Exchange. Ford shares rose 17 cents to $10.41.

General Motors Corp., http://www.gm.com

Ford Motor Co., http://www.ford.com

thats absolutely HUGE increase in sales.

 

[Ausm]

Maybe that's why everyone else is copying them! 😉


Ausm

 

[fbrdphreak]

"We see this as an indication that America's desire for trucks and SUVs is still a strong force in the marketplace," GM vice president of marketing Mark LaNeve said.

I see it as an indication that GM had to announce some huge "discount" to get ppl to buy, not like the dealers weren't offering the same discount as is just to move the vehicles. Now how many people will buy after the discount ends, hmmmm?

 

[DragonMasterAlex]

Down with general motors. May all American car companies go bust, because they sure as fvck deserve to.

Jason

 

[MikeMike]

Originally posted by: DragonMasterAlex
Down with general motors. May all American car companies go bust, because they sure as fvck deserve to.

Jason

ignore the troll, continue the discussion on the increase.

 

[vi edit]

How do these things work for the dealers? Before the deal, the dealer may have been able to eak out a couple hundred bucks above invoice after some negotiating and walked away with a little bit of profit.

Now, with the no haggle deal they are running, there's not really any room left for markup so the dealer can't pad their pockets any.

Not including holdback, are the dealers really getting hosed with these types of promotions? Yeh they sell cars and might be able to turn a few bucks on a trade in, but the point remains they have no control over the price.

Does GM reimburse them some pre-set amount for each car they move?

 

[yllus]

The problem, of course, is that when this discount offer ends nobody will buy anything.

 

[DragonMasterAlex]

Originally posted by: nourdmrolNMT1

Originally posted by: DragonMasterAlex
Down with general motors. May all American car companies go bust, because they sure as fvck deserve to.

Jason

ignore the troll, continue the discussion on the increase.

Don't worry, already ignored you 🙂

Jason

 

[iwantanewcomputer]

but they're not making any money on it

 

[vi edit]

Originally posted by: yllus
The problem, of course, is that when this discount offer ends nobody will buy anything.

That, and it continues to feed the disgustingly miserable depreciation of their models.

 

[iamwiz82]

Originally posted by: vi_edit
How do these things work for the dealers? Before the deal, the dealer may have been able to eak out a couple hundred bucks above invoice after some negotiating and walked away with a little bit of profit.

Now, with the no haggle deal they are running, there's not really any room left for markup so the dealer can't pad their pockets any.

Not including holdback, are the dealers really getting hosed with these types of promotions? Yeh they sell cars and might be able to turn a few bucks on a trade in, but the point remains they have no control over the price.

Does GM reimburse them some pre-set amount for each car they move?

Dealer financing, extended warranties, and accessories

 

[vi edit]

Dealer financing, extended warranties, and accessories

Ouch. I know a lot of people finance on their own, never pick up the extended warranty, and thumb their nose at the aftermarket stuff like clear coat sealant, uholstry treatments, and the $250 pin striping. 😛

Assuming you turned all that down, like many people do, would a dealer get pretty worried when they find out their manf. is offering a promotion like this?

 

[drnickriviera]

Originally posted by: iwantanewcomputer
but they're not making any money on it

Bingo, this is just a PR stunt to get them out of the gutter. Who cares if you sell 10 million cars in a day if you make 10 cents of profit. I want to see more numbers.

 

[fbrdphreak]

Originally posted by: vi_edit

Dealer financing, extended warranties, and accessories

Ouch. I know a lot of people finance on their own, never pick up the extended warranty, and thumb their nose at the aftermarket stuff like clear coat sealant, uholstry treatments, and the $250 pin striping. 😛

Assuming you turned all that down, like many people do, would a dealer get pretty worried when they find out their manf. is offering a promotion like this?

I'd be pissed if I was a dealer or a GM employee. To me GM supposedly offering the same discount I get for working for a company that is heading downhill would piss me off

 

[fbrdphreak]

So am I the only one who thinks GM needs to consolidate brands, increase quality control, and maybe offer 5/7/10 year warranties standard?

 

[brian_riendeau]

That, and it continues to feed the disgustingly miserable depreciation of their models.

DING! We have a winner. GM would do themselves a favor to lower the base cost of their vehicles instead of always trying to offer one huge discount after another. At one point last year, locally there was $4,500 in rebates and incentives on Chevy Cavaliers which have a bare price barely over $13K. Assuming someone got that base model, that is %35 off right there. It takes some vehicles years to depreciate %35 from the base price.

Sure, GM always has a reason for trying to clear out inventory for the newer models, but once you offer discounts that huge, you completely destroy the resale value of anyone else owning those vehicles. GM makes some decent vehicles if you want to buy one and then drive it until it is a complete POS. If you want to possibly trade in or resell a vehicle in a few years, people need to avoid GM.

 

[imported_Soldier]

Originally posted by: fbrdphreak
So am I the only one who thinks GM needs to consolidate brands, increase quality control, and maybe offer 5/7/10 year warranties standard?

No your not. My company car is a Chevy....I'm not at all impressed with it and would never buy one. For that matter I don't buy GM vehicles at all because of quailty issues.

I can tell you why Ford sales have dropped off, Ford is run by dopes, that's why. The Ford quality is ok, it's the styling or engine choices that leave me cold these days when looking at Fords. New Ford 500, nice looking car, decent quality, lame engine. Ford Focus, redesigned into a cheap looking dull car which is a shame since they are actually good cars; with agressive styling and a bit more horse power they would sell tons of them. Ford trucks = way way too damn expensive, even though they are among the best made. Ford Mustang, well I have nothing to complain about on the Mustang, great car all around and the only current Ford I would buy....

 

[Freejack2]

I was going to say something about this then it occured to me I don't really care anymore.

 

[MikeMike]

actually GMS is good for dealers, and salesmen. from what my dad has said, as a salesman himself for one of the largest dealerships in Ohio (Classic) when someone came in saying they were gms, it was just that much better, still made money on it, dealer made money on it, it was a no hassle, no nothing easy deal.

and GM still makes a good amount of money on it.

 

[prontospyder]

good news for GM. Looks like all GM divisions had massive increases except for Pontiac (which had a 17.4% drop over last June).
http://www.theautochannel.com/news/2005/07/01/136400.html

I'm suprised Toyota/Nissan continued their sales momentum despite GM's monstrous performance.

 

[Platypus]

But it's still a GM 😛

 

[Otaking]

I wanted the Saab 9-2X 🙁

 

[Dimmu]

Looks like we are moving some money/faith back into the American-produced car industry.

 

[CPA]

Originally posted by: vi_edit
How do these things work for the dealers? Before the deal, the dealer may have been able to eak out a couple hundred bucks above invoice after some negotiating and walked away with a little bit of profit.

Now, with the no haggle deal they are running, there's not really any room left for markup so the dealer can't pad their pockets any.

Not including holdback, are the dealers really getting hosed with these types of promotions? Yeh they sell cars and might be able to turn a few bucks on a trade in, but the point remains they have no control over the price.

Does GM reimburse them some pre-set amount for each car they move?

There money comes from the holdbacks and the rebates. But more importantly for dealer right now is that inventory is moving off the lot allowing them to save interest on their loans.

 

[spacejamz]

This was in today's Dallas paper...it states that the average savings was $400-500 dollars...I thought it would have been more...

GM has best month in 19 years

Employee discount promotion lifts sales 41% in June; Chrysler to launch similar deal

11:23 PM CDT on Friday, July 1, 2005

Associated Press

DETROIT ? General Motors Corp.'s sales soared 41 percent in June to their highest monthly total in nearly 19 years thanks to a promotion that let customers buy cars and trucks at the employee rate, new sales figures showed Friday.

General Motors said it will announce soon whether it will extend its discount promotion, which is scheduled to end Tuesday. DaimlerChrysler AG's Chrysler Group said it would launch its own employee discount plan next Wednesday. Despite falling sales, Ford Motor Co. declined to match GM.

Asian brands also continued their surge last month. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. all posted their best June sales periods ever in the United States, while South Korea's Hyundai Motor Co. said June was its best month on record.
The Chrysler Group had its seventh consecutive quarter of year-over-year increases.

GM, the world's biggest automaker, said June was its best month since September 1986. Paul Ballew, GM's executive director of global market and industry analysis, said the company would announce soon whether it plans to continue the discount, which is scheduled to end Tuesday.

The boom was driven by record truck sales, which increased 69 percent.

Mr. Ballew said GM attracted roughly 150,000 new customers in June. They typically bought vehicles for an average of $400 to $500 less than they would have paid in May, he said.

Ford's top sales analyst George Pipas said Ford considered matching GM but decided to stick with its sales strategy. Ford began offering $1,000 last month to employees who persuaded friends and relatives to buy a Ford. That deal runs through Sept. 30.

Mr. Pipas acknowledged GM's program as a huge success but said attracting buyers after the promotion will be more difficult.

"The interesting thing about a clear, compelling message is that it's a clear, compelling message," he said. "Customers know when it's on and when it's off."

GM shares rose 65 cents, or 1.9 percent, to close at $34.65 on the New York Stock Exchange.

Ford shares gained 7 cents to $10.31 and DaimlerChrysler shares fell 3 cents to $40.48.