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Not as a percentage of the selling price.
As of September GM continues to have the highest average transaction price of any other manufacturer. The incentive to transaction price percentage is lower than Nissan, about the same as Toyota and only slightly higher than Honda.
September 2011 average transaction prices
I'm not a math wiz, but how can incentive percent of transaction price be so close when GM is over 3,126 per unit and Toyota is 1,800? GM's average transaction price is no where near 2x GM's.
According to truecar for November the actual numbers are 9.4% for GM and 6.5% for Toyota.
That describes the majority of buyers. Not that there is anything wrong with that. GM and Ford have sold millions of cars to people who don't care about what they drive. Due to new company vehicles every few years I've sampled many of them and I wouldn't spend my own money on any of them. Impala, Grand Prix, Taurus (several), etc, I can't imagine anyone who truly likes automobiles wanting them. They can be bought relatively cheap, and are generally inexpensive to own. That's all many care about.
The Cruze seems more appealing to me over a Corolla, but I fully expect the average Corolla would be more reliable, but it should considering the powertrain.
One thing I like about the new Camry is it still offers a great v6 powertrain. Sure it's not a sport sedan, but high 5 to low 6 second 0-60 is damn impressive. I'm not ready to switch to a N/A 4cyl family sedan.
I will say the new Passat looks impressive. I'd certainly give one a look in that segment.
GM needs to ween themselves off of incentives and they know it. Their pricing models must continue to change. GM is predominantly a truck company. Now they are trying to grow their cars back to competitive levels....without the high incentives and high fleet sales....less clones.
Regards,
OW
Regards,
OW
Those aren't your average family cars either.
I love cars too, but I don't drive anything exciting or particularly worthwhile. 1 is free and the other does what I need it to do, mostly. Haul the kids and summer toys, and bust through the occasional snow drift. I'd love a 3rd vehicle as a toy, but I've already have too many other toys to maintain. Once the kids are gone I guess, or the watercraft are sold.
If I were to buy something I aspire to own, the domestics have very few offerings.
AKA Mercedes who out-style BMW afaic. Ultimate Driving not withstanding!
Regards,
OW
Regards,
OW
Regards,
OW
Another way of looking at it is the companies with reputations for unreliable vehicles (previously Hyundai and GM) are the ones with the really long warranties, to try and convince the public to not worry about the reliability of their vehicles.
I generally don't consider a warranty as part of my criteria for picking a vehicle. If I don't like the warranty, I'll just pay for the manufacturer's extended warranty which is generally far more comprehensive.
I'm sure GM dealers still sell quite a few extended warranties to plug the holes in the the extended manufacturer powertrain warranty.
I got the transaction prices and the incentive percentage numbers from this source:
Incentive
You don't need to be; the percentage numbers are all readily available here:
Incentive
Here are the GM profit in the past 20 years according to the Fortune 500:
1992 to 1993, lost
1994: $2.5B profit
1995: $4.9B profit
1996: $6.9B profit
1997: $5.0B profit
1998: $6.7B profit
1999: $3.0B profit
2000: $6.0B profit
2001: $4.5B profit
2002: $0.6B profit
2003: $1.7B profit
2004: $3.8B profit
2005: $2.8B profit
2006 to 2009 lost; 2010 NA
2011: $6.2B profit
That's not a bad record. Please prove your claim that only 1 in 20 years GM had more profit than Japanese.
Please also prove your claim of the flaws of the GM accounting method.
That's the sad part of many cars sold in the US and many American drivers.
I wanted to try out the new Ford Focus (I test drive every model in the market), so I reserved one in a recent business trip. Too bad when I got there, they only had a Toyota Corolla. I thought how bad could it be? I was nicely surprised. It's like driving a car in a computer game. The car had no feed back from the steering, accelerator or brake. In a freeway driving with the cruise control on, the car kept hunting up and down in RPM and cannot just settle to a constant speed. Same with the brake; I could not make a smooth deceleration because when I pressed the pad deeper and deeper, nothing happened for a long pad travel and all of a sudden the brake kicked in hard. The steering wheel could not make a perfect straight center either.
I drive in many countries when I travel. In the two lane express ways in Europe, most drivers would stay in the right lane and leave the left lane open for passing only. We could drive well over 120 mph. Most drivers are very alert. I barely see any Japanese cars there.
In the US, even when there are 4, 5 lanes on the freeway, you can always be blocked by slow cars running at the same speed and forming a wall across all lanes. The drivers are slower and careless, making phone calls, eating food or reading maps.
Treating cars as appliances and driving with "I own the road" attitude really affect other people too.
Akerson said the $2.2 billion profit represented a "solid quarter," thanks to GM's leadership positions in North America and China. "But solid isn't good enough, even in a tough global economy," he said, adding that GM needs to do a better job of leveraging its global scale to improve its margins. A lot of that will come by eliminating waste and complexity in GM's engineering department. Global product-development chief Mary Barra (whom FORBES recently profiled) estimates GM wastes $1 billion a year on what she calls "churn": on-again, off-again vehicle projects, late design changes and transfers of engineering work from one part of the world to another. Like Ford Motor ( F - news - people ), GM is moving toward so-called global architectures-- single sets of components for vehicles worldwide--which will boost its economies of scale. But Ford has been working on that for several years. GM is only getting started.
Regards,
OW
Sheesh, I've read a lot of off-the-wall stuff here before, but I've got to believe you're in the minority of folks on this one.
You should also consider the size of the profit that GM was making, is pretty small. Most corporations and their stockholders are looking for a profit that's about 12% of revenues. Make a 2nd list and put down what GM's profits were relative to the size of their revenues, and you will see why investors shunned them. You may then understand why GM was living on the edge of bankruptcy, and why some economic turmoil sank them.
Also - you should note that under the bankruptcy agreement that GM has, the U.S. is not collecting income tax on any "GM profit". If GM paid 37% tax as a normal business does, the 2011 profit would be much less.
On another topic - GM's business model - which was quoted on why they can have such high incentives. If GM's business model continues to be Large PU's and SUV's as it appears to be with their #1 vehicle being the Silverado, GM could again be in big trouble, if the near-term path is followed in the Middle East. Israel or the U.S. is on a path to stop Iran's nuclear program, and when that war begins, the oil lanes in that area and Iran's oil shut down. Oil and gasoline will double overnight.It's not going to help any auto manufacturer. But I guarantee you GM has no plans other than to claim "how could we expect this and plan", and "now we're broke".
By the way, a little tid-bit for the hated Koreans:
A new study by the Ann Arbor-based Center for Automotive Research estimated Hyundai supported more than 94,000 jobs in the United States and contributed over $7 billion to the US economy this year. :P
Regards,
OW
But there is a simple logic to the truck surge. First, automakers are still offering thousands of dollars worth of incentives on some truck models. The recession and slow recovery also seem to have created a lot of pent up demand. Second, and most fundamentally, consumers now think of $3-a-gallon gas as the new normal and are returning to their beloved pickups and SUVs as a result.
Those big-car-loving Americans are also finding some more fuel efficient options these days. The most popular vehicle in America is still Ford's F-Series pickup truck, which is still, fundamentally, a gas guzzler. But crossovers, which offer styling similar to an SUV with significantly better gas mileage, have made up 42% of this year's light truck sales.
All of this has been crucial for Detroit's automakers as they've tried to climb their way back from the low points of 2009. Ford and GM have both made great improvements in their small car lineup. But for all the talk of cutting costs to eek profits out of sedans and compacts, trucks are still the profit center. There aren't any official figures available on what the automakers earn on each of their models, said Jesse Toprak, a long-time auto analyst with Truecar.Com. But his company projects that the domestic car makers are still just about breaking even on small cars. Meanwhile, he says, they make a profit of about $5,000 on each truck.
Since their near collapse, Detroit's automakers have gone to great lengths to remake their image. Their new narrative is about learning to cut expenses, make small cars, and go head to head with Asian imports. Ford and GM have achieved some of that. When it comes to cutting costs, its even true with Chrysler. But ultimately, Detroit's car makers are still, at their core, truck makers. That hasn't changed.
GM is doing better but look out for $5 gas in 2012.
Regards,
OW
Certainly better than a few years back, when they had zero presence here but sold here.
One wonders if the above numbers are the same or less if those cars had been sold by the Detroit Three instead.
Keep wondering...they were not sold by the D3. Period.
Expect those number to only grow, like it or not.
ANN ARBOR, Michigan — Hyundai is considering building another plant in the United States to meet rising demand for the South Korean company's vehicles, its top US executive said Friday.
"We are looking at the situation very, very carefully," said John Krafcik, president and chief executive officer of US operations.
The South Korean automaker has experienced strong growth in recent years as it expanded its product offerings and benefited from savvy marketing campaigns and trouble at its competitors.
Sales are up 20.5 percent so far this year while its market share has jumped to 5.2 percent from 2.98 percent in 2008, when auto sales collapsed following the financial crisis that pushed General Motors and Chrysler into bankruptcy.
Regards,
OW
I purchased a 2011 Cruze Eco on July 1st of this year. I opted for the manual trans, without any frilly options, paid $19,175 plus tax etc came to just about $20,400. I am very pleased with the car. The gas mileage is killer, just did a 222 mile trip to San Diego, 111 miles each way, I really took it easy at 65mph on way down and got (pencil and paper caluc) 49.6mpg, and 46.9mpg total round trip with stop and go traffic much of the return trip. It will easily achieve the EPA numbers. I drove the Ford Focus, and looked at some Mazda models. Mazda had 0% interest, Ford had a hatch back, but the Chevy won out on looks, MPG, warranty, and I really thought Chevy stepped up on this one, I just liked it, as well as the "buy American" factor. The front seats are firm (which I like), but the bottom bolsters would pinch in on a person on the thighs if you were "big" or any bigger than I am, and rear leg room is nil with the front seats all the way back, but not bad if the people in front are under 6'. I am 5' 11" and 200lbs, and the seat goes so far back I cant reach the peddles, so front leg room is great. The little 1.4L 4cyl turbo pulls surprisingly strong, and the car has a bit of a split personality with the turbo. The up scale interior option has a weird fishnet material on parts of the dash, didn't like that look, so stayed clear of that. I drove a Cruze LS with a 1.8L auto, didn't like the auto, too much hunting for gears, and too much RPM to shift for my taste, I don't like slush boxes anyway.
I have about 8000 miles on it, and absolutely no problems, no complaints, and no regrets.
Wow, and actually built in the northern half of the U.S.!
Unlike Chevy's earlier "XFE" models (which I own), the Eco is nicely-trimmed...bright aluminum wheels, power windows and locks, etc.
I won't argue that. Let's face it, in the late 90's when gas was cheap, the transplants were introducing what was then cutting edge technology for hybrids and the D3 were putting their monies into SUV's and PU's.
But to say they don't have the capability??? I can't go that far. If they put their monies into technologies with long term thinking in mind, they CAN compete.
It may not be the greatest example (or effort, either) but the 2012 Lacrosse offering the e-Assist gives you 25/36/29 numbers for $30K. Now IIRC, the e-Assist gives you a 15 hp motor that not only runs the car at slow speeds but assists the engine. That should give you close to 200 hp.
If you don't like that you can opt for the 303 hp V6 at NO COST!!! What is the premium for the GS hybrid over the GS??? $7000???
$7000 to get the same Fuel economy as a $31K Lacrosse???
Now granted, you can't get both (FE+HP) in the Lacrosse, but you ARE talking about a $24K price differential.
You may argue that the ES is more in The Lacrosse's territory, but at a base price almost $6K more than the Lacrosse, there is NO hybrid offered. e-Assist may be simple technology and not comparable to Synergy drive, but it beats offering nothing, which the ES does nicely!!!
Now I see the difference. The numbers you quoted are from September and I was using numbers for November.
November Incentives
Toyota's avg. transaction price was $27,692 with $1,800 in incentives vs. GM's $33189 avg. trans. and $3,126 in incentives.
It does seem every source for these numbers are different.
I'll retract my previous claim. When GM initially went public GAAP numbers weren't available. So I haven't looked at their financials since then. The 10Q as of Nov. 9th are suppose to be GAAP numbers.
I'm not going to go through 20 years of Toyota numbers, but most of the profits for GM during the years you posted are from the GMAC lending money to anyone with a pulse.
Toyota had 14 billion in profit 2007 alone. It's a moot point really. We all know how well the old GM performed.
The only numbers I have for Toyota are
2011 5B
2010 2.5B
2009 -4.7B
2008 18.9B
2007 14.7
2006 11.5
Considering 2009 was Toyota's first loss in 70 years, I still say TM has made more money than GM over the past 20 years.
Yikes, I don't know how I got into having to defend Toyota. I've never owned one and likely never will. So I'm no fanboy by any stretch.
My point is once you past the bumper to bumper portion of a warranty, there are a lot of areas that aren't covered.
My Expedition had a 4 figure repair at 59k miles while still under Ford's 60k extended powertrain warranty. The warranty did nothing for me. I've got 95k on it now and every repair I've had would not be covered even if Ford matched GM's 100k mile powertrain warranty.
Thus IMO, it's a marketing ploy.
Okay, If I'm looking at two cars and I like them about the same and they are the same price, maybe the longer warranty would sway me.
I wrote "lost" instead of "loss" was due to my poor English. I realized that later but did not go back to edit it because I thought when you lose money, you are lost too...
The post was to rebuttal the claim that last year was the only year in which GM made more money than Japanese. So I did not need to post the years when GM was in red. All I need to do is to find one more year GM made more.
Indeed, not bad is not good enough. I never said GM was doing great; I just try to point out it's not as bad as some people here portrait it to be.
A friend of mine was wanting a new car to replace his Cavalier that he used to just drive to work and back. He was wanting to buy an all electric or hybrid. I asked him if he was aware of the Cruze Eco. He said know. I told him the mileage it was suppose to offer and the approx. cost. I saw him a month later and he bought the Cruze and was happy.
My minivan is a twin (Quest/Villager). The Ford powertrain warranty was 3/36 while the Nissan was 5/60. Didn't need it, but it was a factor in not considering the Mercury harder.
WarrantyWeek.com runs articles all the time about how much money the automakers have to put into reserve to cover warranty claims. It's very much in the car maker's interest to keep those costs low, and the fact that some companies are willing to give a longer warranty indicates to me that those companies are paying attention to how well they can build their cars, offer a longer warranty, and still make money.
We had a Villager for a while, put 100k trouble free miles on it. I had an 01 Nissan Pathfinder that had the 3/36BB and 5/60 powertrain. Had an o2 sensor fail at 25k or so, that was covered and another in the 50k range that wasn't covered under the powertrain warrranty.
IIRC, when I bought a new Neon in '95, I had a choice of 3/36 bumper to bumper or a 12/12 BB and 5/50 powertrain. I took the 3/36 and it covered all the small problems I had between 20-30k miles that the 5/50 powertrain wouldn't have covered.
It may be that I simply don't have a good experience with most warranties.
EX. the paint is bubbling and beginning to flake of the tailgate of my Expedition. The aluminium is obviously corroding. But Ford's corrosion warranty only covers perforations so it's essentially useless. It's just great that Ford doesn't seem to have issue with selling $40k plus vehicles that have the paint fall off within 4 years.
When I get some time, I'm going to have the tailgate repainted since Ford basically told me tough $#!7
I'm sure with the D3 those numbers would be much larger, as the D3 are not as efficient. But the key is sustainable jobs. I don't see unsustainable jobs as being good in the long run, as they are just going to be lost and hurt our economy. Better to prune the tree and get it healthy. Something that the UAW with their opposition to productivity rules and automation should have figured out.
I resemble that remark!!
GM can do some things right. They shed their debt and we were forced to be part owners and now they have some religion and build/design their new post-2008 offerings much better though borrowing heavily from Euro-designs.
The Cruze is worth it's weight. Best small car GM made, afaic. 2010 Lacrosse, Regal....other fine cars. CTS....ditto. Corvette....ditto. While they are all not perfect, they are a huge improvement over Old GM.
GM has the capability of being the best car company one again but far from that at the moment. Don't you think there is room for improvement? Or do they do no wrong in your view?
Regards,
OW
That's the question. Can they put their money into technologies that lead or does their current business model, weighted HEAVILY into truck profits, preclude leading the investments necessary as energy costs skyrocket?
Regards,
OW
Barely broken in - should've kept it. :P
Maybe this LaCrosse had a defect or something, but it didn't even average 20 mpg, and this reviewer is not a Top Gear / track driver.
http://www.usatoday.com/money/autos/reviews/healey/story/2011-10-13/buick-lacros- se-test-drive/50759458/1
Yeah I know, but I needed/wanted something could tow. Actually, at the time we had an 18' boat that I did use the Villager to tow. It did it, but man it was slow going and fwd was a bit scary at the boat ramp.
Nissan's 3.0 SOHC v6 was nearly bullet proof, but a bit shy on power for a minivan. To bad they didn't use the 3.0VQ back then. Nice driving van though.
That isn't really the problem. In fact, every car GM has made has been the best car GM made in its category. They are always able to improve their designs, mostly without exception. The question is if GM is able to make the best of anything in its class compared to the rest of the industry, which is a MUCH bigger question mark. They're not there yet. THAT'S where they need to get, because as improved as their cars are, they're playing second fiddle in most categories, to either Toyota, Hyundai, or Ford.