[GotWind]

I'm talking about the big sales results from the desparate domestic manufaturers employee discount promo. Last month was huge for GM.Ford etc.

I have to admit I did not think it would be as successful as it has been. I hope people are buying the economical models instead of the gas guzzling trucks & SUV's. I feel for all the folks that work for the Ford's & GM's out there. Just think if Ford right now had 5 decent hybrids. They would be killing it.

Do you think the buying spree is just another indication of American short-sightedness or what??

[dub_scratch]

$this->bbcode_second_pass_quote('GotWind', ' ')I hope people are buying the economical models instead of the gas guzzling trucks & SUV's. . . .

Do you think the buying spree is just another indication of American shortsightedness or what??

[jdmartin]

Well, the jump up in sales is obviously due to the incentives.

There are a number of inherent problems with incentives, especially when it comes to huge-ticket items like cars.

First, you give incentives like that and people will come to expect them. That means you always have to outdo the incentives you had before. A race to the bottom, so to speak. Except it's very difficult to bring the cost of a car down very much. So these companies are going to have a hell of a time in the future keeping sales up.

Second, and more important, major incentives only cannibalize future sales. What it basically does is gets everyone who was thinking about buying a car in the next several months to come in and buy it now. Of course, the market for cars is finite, rather than infinite. So when all of them people are finished buying their cars, the companies are going to be in for a big surprise: there's not hardly any buyers left out there.

I don't think I would say it is complete short-sightedness, as it is unlikely that in the next 5-7 years (average lifespan of the car) that cars are going to go away. So if you really needed replacement personal transportation, it was probably a smart time to buy. If you didn't need it in the first place, it was a waste regardless of Oil.

The bigger problem for the auto industry, as I see it, is the continued stagnation of working wages, which is allowing fewer people of the masses to avail themselves of new cars. I have a friend that owns a upper-end used car dealership, and he has told me in the last 3 years good used cars are getting impossible for him to come by. They go to the dealer auction to pick up the vehicles - most of them trades on new vehicles - and there's hardly anything worthwhile to choose from, because the dealers are keeping the good used cars now for themselves. Why? 2 reasons:1, more profit on a good used car, and 2, not enough people anymore can afford the new cars.

[Vexed]

This is success?

Big Sale Doesn't Stop Big Losses for GM

GM Losses Worst Since 1992

Like jdmartin Said, "Its a race for the Bottom."

[Badger]

More fudged numbers and talking head bullshit run by the corporate media owned by billionares. Shit they probably have shares in the car companies...Its business as usual as "they" say

[cube]

Maybe if GM would start making cars that people actually wanted to buy they wouldn't be having this problem.

The last time I checked there was practically a waiting list for Japanese hybrids. GM got into this mess because they failed to forsee the potential of hybrids. While the Japanese were quietly developing hybrid technology for the past 10 years GM instead betted the farm on big SUV's and monster sized trucks.....now the failed strategy has come back to haunt them.

I think one of the biggest changes to come out of this is the public's perception of company pension plans. It used to be that if you were participating in your companies pension plan then you were making a "smart" financial decision. Now the concept of a company pension plan has as much credibility as the social security system.

[I_Like_Plants]

Look at the "news" the sheeple are being fed, the dow's way up, things are fine, the war's going great, real estate's booming, etc.

Since the American memory only goes back 5 years, the eerie parallels between this war and the Vietnam war don't register. Since the dot-com crash is getting to be more than 5 years in the past now, 'murricans don't see their their dot-home-bubble is the same thing.

Read the paper and watch the televitz and put yourself in the shoes of a person who gets no other news, and things look rosey, oh so rosey.

I agree on hybrids too, all a heroin addict needs is cheaper smack, indeed.

[Keith_McClary]

$this->bbcode_second_pass_quote('jdmartin', '
')
There are a number of inherent problems with incentives, especially when it comes to huge-ticket items like cars.

[jaws]

It's an admission that American cars can no longer compete on quality with foreign cars and have to compete on price. The future of the automakers is cheaper and cheaper cars. Their brands have all been completely destroyed. Toyota evokes a lot better feelings than 'Oldsmobile'. Even Kia has a better brand name than GM does.

What they are doing with the discount is cutting losses on their current inventory. They have to start with entirely new models. The game is over for them for now, possibly forever.

[jdmartin]

$this->bbcode_second_pass_quote('jaws', 'I')t's an admission that American cars can no longer compete on quality with foreign cars and have to compete on price. The future of the automakers is cheaper and cheaper cars. Their brands have all been completely destroyed. Toyota evokes a lot better feelings than 'Oldsmobile'. Even Kia has a better brand name than GM does.

What they are doing with the discount is cutting losses on their current inventory. They have to start with entirely new models. The game is over for them for now, possibly forever.

[Ghog]

$this->bbcode_second_pass_quote('', 'W')hat they are doing with the discount is cutting losses on their current inventory. They have to start with entirely new models. The game is over for them for now, possibly forever.

[Eli]

Here is why GM and Ford put on those huge sales.

"In April, SUVs such as Ford’s Explorer and Expedition and Chevy’s Tahoe and Suburban represented 12.1 percent of the U.S. car and truck market. This was the lowest point for that segment since May 1996, according to the Power Information Network, a J.D. Power and Associates affiliate that tracks daily sales at dealerships.

Such vehicles are especially important to domestic automakers, since Ford, General Motors and Chrysler have sold 86 percent of all large SUVs so far this year, Edmunds.com said. They provide a big source of profits for their makers.

Buyers are increasingly turning to car-based SUVs, the so-called crossover utilities, said Tom Libby, Power’s senior director of industry analysis.

Those vehicles can offer all-wheel-drive, seven seats and plenty of cargo room — just like a traditional SUV. But they weigh less and get better gas mileage, and that has meant sales growth." News about auto sales

If we have some signifigant terror strikes at the oil industry in SA and elsewhere all of sudden cross over sales will tank too but bike sales will go through the roof.

[Keith_McClary]

$this->bbcode_second_pass_quote('Ghog', '')$this->bbcode_second_pass_quote('', 'W')hat they are doing with the discount is cutting losses on their current inventory. They have to start with entirely new models. The game is over for them for now, possibly forever.

[Roy]

I think its a last ditch effort by GM. Ford and DC had to respond in kind just to keep some of their market share. At the end of June, GM reported their largest monthly sales in some time (can't remember exactly).

Two weeks later, on marketwatch.com, GM announced a $312 billion loss in the second quarter despite the record sales.

Have you driven past a Chevy dealership lately? Take a look at what's on the lot,.. 70-80% large SUVs and pickups.

I see this era as a replay of the 70's oil crunch in terms of automobile mfgrs anyway. Back then the Americans were the last to jump on the small car bandwagon. Only a constant beating in the profit column forced them to move to smaller cars.

Remember the Vega, or the Citation. Both total POS. That was GMs answer to the Honda Civic, Toyota Corrola, and Nissan B210.

Only cheap oil in the late 80s and throughout the 90s allowed the big three to prosper. How did they do it? By aggressively marketing concepts that allowed them to produce highly profitable vehicles that required little updating or engineering improvements over designs of similar vehicles from the 60s.

While Toyota and Honda were working on the next generation of personal vehicles, the Big Three were greedilly raking in massive profits off SUV sales.

Classic American Short Term Thinking in action. Now, they're starting to feel the consequences of their myopic strategy. Its sad in a way.

To think that our "best and brightest" lacked the foresight or inclination to understand the concept of finite resources and their impact on the personal vehicle market.

Of course, those top strategists will provide themselves with golden parachutes regardless of the outcome for the rank and file workers.

Another classic american idea: Me first, f**k you.

Where I live, this is much more common than consideration or politeness.

In the past, courtesy was a virtue. Now, its a handicap. At least thats what it feels like when I'm courteous in traffic or at the store, or at any large gathering of Americans.

Sorry if I'm a little jaded. Experience is the best teacher.

[MD]

When zero percent financing came into play after 911, the current crisis was set in stone.
This latest round of price cutting will just deplete their cash reserves. Game over.

[RiverRat]

I had an opportunity over the weekend to speak with two different sales managers for large domestic car dealerships in Ohio.

They both independently said that the Big Three auto makers will continue to offer different incentives until they can produce cars that can compete with Japanese models. They both said that they hope this happens sooner rather than later.

What was even more telling is that that they both said that about 2/3rds or 66% of their buyers have negative equity (upside down in their loan). The one guy even said that he just wrote a deal for an Explorer where the payment was going to be $680 / month for 5 years.

Crazy

[Ghog]

$this->bbcode_second_pass_quote('', 'A')nother classic american idea: Me first, f**k you.

Where I live, this is much more common than consideration or politeness.

In the past, courtesy was a virtue. Now, its a handicap. At least thats what it feels like when I'm courteous in traffic or at the store, or at any large gathering of Americans.

[rs]

Welcome to the world of the corporation.

Big fat Board members creaming off the profit for themselves and their shareholders.

Like you say, they all have their golden parachutes, the rest of us are left to pick up the pieces. Corporations are the biggest fuck-up of the last 150 years.

[0mar]

I think this is GM tryin to rebuild investor confidence. I remember reading that GM loses like $700 per car that rolls off the assembly line. This new pricing deal is hurting them harder, I think. Unless they've made some huge financial strides, I think this deal is in place to try to rebuild investor confidence.

[gt1370a]

$this->bbcode_second_pass_quote('Roy', '
')Two weeks later, on marketwatch.com, GM announced a $312 billion loss in the second quarter despite the record sales.