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Daily Edition: Jul. 7, 2004


GM and Ford to Up Spiffs Today

Smarting from slow June sales and sweating out a potentially lean summer, General Motors upped its lease deals following the holiday weekend and is expected to jack up rebate cash on slow selling models today as well. Ford is expected to increase its offers as well.

GM has cut lease offers by around $30 per month, sending dealers to their call lists Tuesday trying to lure people who sniffed a new vehicle in June but didn't bite. GM is also revving up another lease pull-ahead program in which it lets customers out of leases early if they re-up with another GM car. Extra cash is coming today, say GM officials.

Already, says Edmunds.com, GM, Ford, and Chrysler hit all-time highs last month for incentive spending. GM was at $4312 per vehicle, while Chrysler was at $3569 and Ford stood at $3328 per vehicle. Imports increased spending too, but they're still well below domestic levels. Chrysler officials said they did not expect to increase deals, as June sales were up five percent and inventories are lower than their cross-town rivals.

Cadillac, says Edmunds, spent the most on spiffs, $6325 per vehicle, followed byLincoln at $5610.

The incentives didn't do much for the domestics in June, with industry sales off six percent, while GM sales off twelve percent and Ford off twelve percent when its Premium Auto Group is counted. And those losses were against a period a year ago in which the U.S. was in the early days of the Iraq occupation.

Among foreign brands posting higher year-over-year results were Toyota Motor Sales USA, American Honda Co., Nissan North America, Hyundai Motor America, Kia Motors America, and BMW.

Inventories of unsold vehicles are at the highest levels in more than a decade, making some Detroit execs a little nervous about clearing lots of 2004 models in time for the '05s.

June Sales Shocker at Ford, GM by TCC Team (7/5/2004)
The wheels come off the incentive-and-rebate game.

Lear Daily Edition

Incentives Reach Record Level

Edmunds.com is calling June's industry-wide incentive spending level of $2747 per vehicle a record high. Spending was up nearly ten percent vs. May 2004 levels, with U.S. luxury brands Cadillac and Lincoln leading the way. Caddy alone dished out $6325 in incentive bucks per vehicle. Neither GM's nor Ford's incentive-spending pace could keep them out of the negative column in June's sales results however.

A look at the Big Six's June spending show a major disparity between domestic and import automaker's incentive spending habits. GM, Ford, and Chrysler all spent better than $3000 per vehicle in June, with GM shelling out $4312 followed by Ford's $3328 and Chrysler's $3569. Nissan led the Japanese in spending, shelling out $1550, followed by Toyota's $749 and Honda's relatively minuscule $597.

Among the lowest industry spenders on a brand basis are MINI , spending $41 per vehicle, but seeing sales dip slightly vs. year-ago levels; Scion, spending $101 per vehicle as it rolled out its national sales network; and Porsche, spending $266 while seeing its car sales improve and truck sales flatten out.

GM dealers now tell media that GM will sink even more money into incentives, slashing lease rates by as much as $1500 over the life of the deal.

Edmunds research indicates SUVs were among the biggest incentive hogs in June, needing more than a $2900 incentive to move even as SUVs lose nearly two points of U.S. market share. Minivans, however, are gaining momentum in the sales category, up nearly a point of market share to 7.7 percent. Incentive spending has dropped 4.7 percent as a result to $2678 per vehicle. -Jack Gilbert


 
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