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Comments
A manufacturer only needs to offer incentives if they can't move cars at or near sticker. It may be because they aren't desirable cars, but not necesarrily because they make crap. It could be because the vehicle is at the end of the run and looking old/outdated compared to competitors (especially with sports/sporty cars). It could also be because the manufacturer simply put out too many of that particular car (GM is very bad about this). Of course it could be because it's crap, or because many buyers "think" it's crap.
I agree and thus its apparent that there are quite a few Hyundai and Nissan models that people will not buy without discounts. Incentives are not going anywhere and its becoming evident that almost every non-luxury manufacturer will use them to some degree in this competitive marketplace. As GM (and later Ford) makes better vehicles I think you should only expect Asian incentives to get higher. When the vehicle quality and execution was clearly tilted in favor of the imports they could charge people MSRP without blinking an eye. Not anymore.
Incentives should be used near the end of a model year to clear out the inventory as next years models start arriving. Incentives may also be used during slow sales months (winter), or for slow selling models to move inventory.
GM's vehicles may be priced a bit on the high side, which may require incentives to get them sold. This does not mean that GM's vehicles are bad, just that the competition is cheaper or possibly better for the price.
I think GM's basic problem is that for an GM vehicle one might consider buying, there are a number of equally good vehicles made by other manufacturers.
I will try to be even more clear. The media puts out articles suggesting that only domestic brands use deals and discounts to sell cars. They quote the incentive dollars per vehicle for each manufacturer and than say "GM offers $3k on each car while Toyota only offers $1k" without taking into account what people ACTUALLY pay relative to MSRP. Toyota and Honda do NOT like to do large national incentive programs so most discounting happens at the dealer level. The Camry may only have $500 cash back from Toyota but every dealer in my area is running ads saying they offer an additional $1000 off sticker before you even start negotiating. The myth that is commonly accepted is that Camrys and Accords sell on quality and reputation whil lowly domestic cars sell based on the deal of the month. That is complete BS because ALL local import dealers advertise (in my area at least) is low monthly payments, rebates and dealer discounts. You will be hard pressed to see anything referencing the camry's features, quality or performance in local ads. This is why I laugh when people act like the "critical" features on a car are bluetooth and nav. When do you EVER see any ads touting those features? People are looking for a deal when they are buying non luxury cars and that is what dealers advertise.
If the average buyer is getting $2500 of MSRP on the Impala and the average Camry buyer is getting $2000 of MSRP than I don't think we can say "Toyota's sell close to MSRP because of their great brand image". I have been seeing a lot of Toyota ads lately touting cash back and reduced financing.
-mike
-mike
I would imagine that GM dealerships will be providing discounts which are on par or better than those of Honda and Toyota to move product. It is a business. Not too hard to figure out. The Accord is going to change in design for 2008 model year, and thus more than usual discounting. The Camry has a good discount as they try to pump the volume of cars sold in America. My guess is that they discount most around the $1.400 some off, like Intellichoice website shows for a good price. And that would be on the V6. And they will easily knock off say $1,500 + on an Accord V6. What I do not see is $3,000 to $4,000 off ads. The local dealership which has Mazda cars is offering $5K off on Mazda6 and $4K off on the Miatas. All is not well at Mazda, I fear. And they are really good cars.
GM knocked off some bucks the sticker price on most of the cars, so this years discounting won't look so bad, no doubt. You still see some hefty discounts now and then, but perhaps only on a lost leader car. Problem with such ads for say $3,000 or more on a car, is that the image of deep discount, bargain basement cars comes to mind again.
When the new RWD Impala comes out, it should have some pricing power to it. And if they get it right, as in a car which wins over the Camry, Accord, and Chrysler 300 both in car reviews, and in the hearts of the buyers, as in a must have sexy look, then bingo -- You've got real pricing power and need but to discount a thousand or so to sell it. The New Malibu should be fair priced with a discount of around a $1.5K or so, if priced like an Aura.
Loren
2014 Malibu 2LT, 2015 Cruze 2LT,
Perhaps because the people for whome features, quality, or performance matter don't use local adds to decide on a car. I don't think I've ever seen an ad touting anything but insanely low (until you read the fine print) payments or cost. Adds in general have gotten to the point where they are just plain laughable with more fine print than pharmaceutical ads.
What I always found interesting were the incetives and rebates that aren't advertised or known aside from the salespeople and dealers. That's by far the most useful information since I can do the math myself: "I want a _____, fair price above invoice - rebate = what kind of deal I'm really getting."
Rebates in general won't affect what car I (or most people)buy anyway. It would only affect the timing. If I'm looking at new Civics, and find out they have a $1000 incentive this week, I might by now instead of a month or two from now.
The ones that bother me are the hidden incentives where the dealer can keep more or all of it from the unknowing customer.
2014 Malibu 2LT, 2015 Cruze 2LT,
"loaded"
"fully loaded"
"air, auto"
"pw/pdl/cd"
Maybe # of miles, the stock number. But it was always the price or incentive in big letters, with "catches & other charges/qualified buyers" in the fine print at the bottom of the page.
Loren
loren
Looked over the used cars the other day and was shocked that few of the dealer ads even mentioned the miles on the clock. Huh?
I do almost all my research online. Between ebay (great for pictures of interiors/trunks/etc, Edmunds (more information than anyone could possibly need), and dealer websites, the only print media I use anymore is Consumer Reports. I've gotten to the point I don't even bother with Motor Trend, Car and Driver, etc. They seem to test all the cars I'll never own: $80,000 sports cars and SUV's/Pickups. I'm lucky to find even one review that interests me.
Rocky
Rocky
To a point, there's only so many people who will purchase a new car each year. Other than making it cheaper to buy a new car than to keep you're current one (and I don't see that happening), pumping up sales in one year will only hurt sales in the next.
Will probably do well if it has knockout style like the Chrysler 300. But, there is nothing magic about RWD layout that will automatically bring in lots of buyers. Ford and Mercury have had RWD large sedans for many years and these have not sold in great numbers. Mainly police departments, municipal and the elderly buy these cars.
Notice that Dodge Charger is a RWD layout and don't think that their sales are significant.
If new Impala will do well, it will be for reasons other than layout of driveline.
Well the Mazda 6 is just doesn't have as much interior room as the Camry, Accord, and Altima so thats why it hasn't done as well as Mazda thought. A new 08 6 will be coming out will be coming out later this year and will address the interior room issue.
BTW, Mazda sales were up 47.9 percent in selling 37K vehicles last month and only Honda and Toyota had more sales growth last month than Mazda.
I think Mazda had their best month selling month in the US dating back to 13 years ago(1994.)
As far as GM sales of cars, to me it seems the last couple of years are a first for even seeing cars on the lots. Before, in California, a Chevy lot may have had say one to three cars, and the rest were SUVs and Trucks. If you saw some Malibu on the lot, it was a rental return. Actually, most of the Impalas and Monte Carlos - ditto that. That was the way people bought a GM car here, as used. Now the Denali SUV and Caddy Escalde (same difference) sold well, and even the CTS. But up until ,most present of times, Chevy, Pontiac, Buick and such had little sitting on the lots. I can see how sales should be increasing on the retail front, they are finally on lots for sale. Saturn, the poor ol' Saturn, had nothing, as in nada, for many years to sell. The Saturn view sold, and then there was the Ion ( twas odd thing indeed ). Seems like with some new stuff on the market and dealerships actually selling cars again, sales have to go up. Well that is unless people still demand the big tanks called SUVs and monster trucks to drive to work,play, or the grocery store trips.
Loren
Loren
In my experience, Honda dealerships are the only ones that do not advertise big discounts for their cars. Nissand and Toyota dealers are all about the discounts and low monthly payments. Doesnt seem like they feel advertising low prices is going to hurt their image in the long run.
I disagree 100%.. While most import lovers are only going to consider one or two models when they buy and refuse to consider all the options available, not everyone thinks like that. Many people will go in a certain direction because of a particular discount or low financing rate. People who have strong brand allegiances are not likely to let a deal spark their interest in another brand, but many people dont care about cars enough to be that picky.
Honda tends to give hidden cash to the dealer as dealer incentives or marketing support rather than actual rebates. The dealer can choose how much to "share" with the customer in a discount. The dealer can keep it all. In effect this is a rebate of the worse kind for the unknowing, innocent shopper because they probably won't get it.
2014 Malibu 2LT, 2015 Cruze 2LT,
As I said the Accords appear to have $750 dealer marketing support but it's probably not in the auto ads that will come tomorrow on Saturday.
2014 Malibu 2LT, 2015 Cruze 2LT,
Honda does not paste a lot of ads in papers or air them on TV for thousands off in incentives, which is fine by me. Keeps the resale of the car higher. The total price in and out, as in trade-in value is excellent.
Do you believe every deal between GM and its dealerships is transparent to you the customer? The government doesn't even know how much GM or other car manufacturers are making on each car. Bottom line is, what is the best car, and a fair price I can live with for my needs at this time. I could have bought an Impala for under $19K, if I wanted one. Did not feel it was a best car for me, so price be damned at that point. And considering the resale value, the price may not be as low as first thought. If you add in wheels without plastic hub caps, stability control, a 244HP SOHC engine and such, I am sure the Impala would be over $24K price wise. The New Impala may prove to be a more sought after vehicle,with its totally new design and features whick may become standard and thus more valuable all around.
Loren
I'm glad I didn't buy the Sierra Denali, now as gas it closing in on $3.00 a gallon. Maybe a 2-mode hybrid Sierra Denali, in the future but now ? NO-WAY !!!!
Rocky
Interest rates here, and abroad do impact the bottom line for company profits. You deal with the cards which you were dealt. Some years things work to your favor and others to someone else's favor. You simply have to make the most of what you have at the time. GM is a world player. This helps to even things out. Japan will adjust rates in ways it seems fit to help their economy, and likewise the Feds set rates and do what they feel works for our economy. Well in theory that is the way it works. Anyway, there is a constant struggle between different countries to best each others economy while at the same time keeping a World economy running without upsetting the tea kettle. GM, as well as all the major manufactures have plants around the world. Be it labor costs, supplier costs, currency differences, government regulations on imports, and so on, all the companies end up spreading the manufacturing and design working and such around the globe.
Product which is desirable, will lead people once again into the showrooms. A product reliable will keep those which buy loyal to the brand. Backing the product after the sale is essential. Being too focused on the other manufacturers of cars current status, a waste of time. Need not worry about where Toyota, or any other maker of cars is now, or how close they are to building more cars. The plan near and far should be to make product which sells for all the right reasons, and let the natural progression of a rebirth of a great car company follow along at its own pace.
Toyota appears to have been very patient over the years to reach for the top. Lately it seems a little too eager to rush the hill. Perhaps a lesson to be learned.
Loren
http://en.wikipedia.org/wiki/Opel
Interest rates here, and abroad do impact the bottom line for company profits. You deal with the cards which you were dealt. Some years things work to your favor and others to someone else's favor. You simply have to make the most of what you have at the time. GM is a world player. This helps to even things out. Japan will adjust rates in ways it seems fit to help their economy, and likewise the Feds set rates and do what they feel works for our economy. Well in theory that is the way it works. Anyway, there is a constant struggle between different countries to best each others economy while at the same time keeping a World economy running without upsetting the tea kettle. GM, as well as all the major manufactures have plants around the world. Be it labor costs, supplier costs, currency differences, government regulations on imports, and so on, all the companies end up spreading the manufacturing and design working and such around the globe.
Product which is desirable, will lead people once again into the showrooms. A product reliable will keep those which buy loyal to the brand. Backing the product after the sale is essential. Being too focused on the other manufacturers of cars current status, a waste of time. Need not worry about where Toyota, or any other maker of cars is now, or how close they are to building more cars. The plan near and far should be to make product which sells for all the right reasons, and let the natural progression of a rebirth of a great car company follow along at its own pace.
Toyota appears to have been very patient over the years to reach for the top. Lately it seems a little too eager to rush the hill. Perhaps a lesson to be learned.
Loren
Well I can't disagree that much with your post. I however feel while you need to work on your own thing it is very vital to watch for trends set by others, otherwise somebody might launch a Aztek, accidentally when the market is calling for conservative styled CUV's
Rocky
I realize that are all kinds of incentives/rewards based on sales and quotas. Are you saying because I don't know those, the technique which Hondas uses almost exclusively to push their slow models is a fair technique for the consumers? I don't think so.
I recall about the 03 Accord era Honda folks were so quick to brag that Honda _never_ has to use incentives to move their cars like those _other_ car companies. Imagine your own emphasis of smugness in those statemetns the way the Honda folks would say them. Then the hidden incentives started showing up and even some overt rebates.
Oddly this is like the secret recalls that were done by some manufacturers so customers wouldn't know their cars had been worked on/repaired which they had the car in for oil change and grease jobs. That helped maintain the reliability image in the customer's eye, "They never have recalls on Hondas and Toyotas." I believe it was Toyota who got some publicity about those secret recalls in the media a couple years ago? Who recalls that?
2014 Malibu 2LT, 2015 Cruze 2LT,
Yes, Toyota screwed up big time on several issues this say last decade. The president of the company apologized. Don't think GM CEO has apologized for three decades of crap. Perhaps then they could go forward with a clean slate. Of course GM are better today. Little debate over most cars being better these days. GM being more open, or honest than Toyota - doubt that.
I think the public has heard of problems with Hondas and Toyotas, as well as the recalls for safety issues. Other names of automobiles may pop up on the radar screen more often since they have more recalls.
Do we hear at any time Honda and Toyota complaining about lack of sales because the other car company is doing this or that. Just build the better car and be done with it. I don't think, in a losing football game, going back to the sideline to tell the coach that the reason you are not winning is that the other team is better, or they got this advantage, would cut it. Nope, coach would say, son get back in the game, and play our game plan, and execute it well. Or maybe he would actually just say, get you [non-permissible content removed] back in the game, but ya get the point.
Loren
Rocky
Yeah a new Mazda 3 is coming out for 09.
"The $4K off the New Miata is not a good sign. If Mazda is selling in North America, it must all be at a cost. At least here on the Coast of Calif, things seem to have slowed."
I agree the 4K off the Miata is not a good sign. I don;t think its at all off a cost if Mazda is selling good. Mazda has been pretty profitable the last few years. You say things in the CA have slowed for Mazda. Why? you notice less Mazda's on the road than a few years ago?
I think I'm one of the few that would look at a Mazda first over a Nissan or a Toyota.
"As far as GM sales of cars, to me it seems the last couple of years are a first for even seeing cars on the lots. Before, in California, a Chevy lot may have had say one to three cars, and the rest were SUVs and Trucks. If you saw some Malibu on the lot, it was a rental return. Actually, most of the Impalas and Monte Carlos - ditto that. That was the way people bought a GM car here, as used."
Well I'll have to say on your point about on the topic of GM selling cars vs trucks ratio the 04-07 Malibu didn;t sell well at all in New Jersey where I live and the 00-05 Impala sold alright in NJ I think(at least the number of them I see on the road) but the 06-07 Impala I don;t see alot of them around.
"Saturn, the poor ol' Saturn, had nothing, as in nada, for many years to sell."
True Saturn only had the S Series I think and the L-Series that came out later in the 90's if I can recall right and thats all that Saturn sold for many years I think before the VUE came out.
BTW, I drove a Saturn small car for a week while body damage on my Acura was getting repaired a few years ago. I didn't care for it it because it was too small for my tastes. The choice was between the Mitsu Galant and the Saturn and I picked the Saturn because it was cheaper to rent price wise than the Galant.
"The Saturn view sold, and then there was the Ion ( twas odd thing indeed )."
Ah. I see some Ions running around in NJ.
"Seems like with some new stuff on the market and dealerships actually selling cars again, sales have to go up. Well that is unless people still demand the big tanks called SUVs and monster trucks to drive to work,play, or the grocery store trips."
Well, I don;t think people well be quickly jumping into big SUVs anytime soon like people did in the late 90's did because of fairly low gas prices during that particular time period.
I think Gm will start to get a fair shake once they come out with product people want to buy and I expect that time to be coming soon with the Pontiac G8 coming out hopefully soon. The 08 CTs not something I would buy probably but is also critical to GM's new product rennisance but you probably already know that.
I don't believe the president apologized to us or for more than one thing. Rockylee cleared that up the last time someone made the statement.
>Don't think GM CEO has apologized for three decades of
I've had GMs since 1977. Where the heck are your three decades. That's exaggeration. I tire of hearing the constant rat-a-tat of the same mantra while Honda has bad transmissions, rattles, hard seats, hard plastics, popping frames and while Toyota has sludge, transmission problems, valve stem seal problems, rattles, vibrations, and others that I read about. Rant on them please when you mention the some bad products GM made. I had a 1977 Cutlass, 1982 Skylark, 1985 Skyhawk, 1987 Buick Century, 1989 Buick Century, 1993 LeSabre, 1998 LeSabre, 2003 LeSabre and haven't had major problems like you're trying to exaggerate. Let's get real.
2014 Malibu 2LT, 2015 Cruze 2LT,
Learn, adapt, don't accept mediocrity, then lead on to a way forward.
I am thinking the G8 and Impala may be examples of right thinking, in that someone at GM learned not to go toe to toe with Toyota, as they have had such a time of doing this since the toe to toe car the Corvair vs. VW. Very good idea to catch Toyota flat footed without a similar car for the price bracket. A RWD car, which is not too expensive and stylish may indeed be the right stuff at the right time. A good adapting to the current situation.
And if done all out, as in giving the customer more than expected, perhaps the cars which are just OK will be history, followed closely by cars which are very desirable, and have better price power. And if done across the board, GM will gain respect with many more people each and every year. The CTS is a respected car, as is say the Corvette. Just do NOT repeat the past with all too many mediocre or poorly executed car designs. The margin for error is slim, to nil. In the past they could spend or bully their way along. The New GM is gonna have to play in the sand lot with other bullies, with even bigger bank rolls. New game - just do it !
And I was wrong in giving the impression that every car GM made in three decades time was somehow bad. It was not ALL crap, but enough to tarnish the image. In other words, for too long, too many cars were dogs, just so-so, or not what the customer wanted. It all caught up with the company. Otherwise all would be so rosy today, and they would be paying down the debt with billions and billions of dollars as people flocked to buy their product. It is true, say the '72 Cutlass was a fine auto, yet they would lay an egg like the Starfire in say '75. There was just no consistency. When the gas crunch hit, they had no cars with the gas mileage required.
Anyway the crux is to not to live the past, but press ahead with new ideas. And those ideas, and paths taken need not be stolen from the competition. When adapting, do it your own way. GM may be getting that now.
I guess we just disagree on the analysis of what happen to GM during the last three decades, which is fine. Never intended to preach to the choir. What instead I would like to see is a return of the days when GM was top of the game, with some trend setting good cars. Cadillac sold the first cars with electric starters. All divisions of GM have a proud history. Just saying there were the dark years when all did not go well, and that pointing out another brand of car as having a similar problem doesn't help your product and sales one bit. You need the product. If a Honda or Toyota is not as good as they say - that being your position I take it, will it make a GM product any better? If seven out of ten people did not like their GM car, are you willing to just sell to the remaining three customers? It may be an issue of reliability, gas mileage, looks/feel, handling or whatever, but not everyone is a GM fan. Those are the people to win over. I am in-between, as I have experienced the good, the bad, and well I guess ugly would be too harsh a word. I would love to see the good stuff again. Or more good stuff, as some of the cars seem to getting there already. If rich enough, while having good garage space for security, I would love a Vette.
Finally, let me assure you I was not exaggerating, as the complete list of woes over the years, you would not want to see here. As long as they do not repeat the past - no problem. If I gave every detail of each car, you would not believe it any way, and it would serve no purpose. I do have a pretty good memory. That good memory works equally as well to recall the better stuff. And that's the reality.
Loren
P.S. First car I drove was my parents '61 LeSabre. I bought a Honda bike.
Later on, I briefly owned a German Ford Taunus, then a '65 Mustang. Drove a lot of different cars from Opel to Oldsmobiles, Datsun to Toyota, Dodge Stealth to Miata, and well.... lots of cars.
Acura, Will have their new beloved TL, out by then and the new TSX comes out when ? 08 ? Are people going to spend TL, money on a G8 ? The Impala, really doesn't have a competitor yet from Japan. The base Genesis, will probably overlap The Impala, and will definely will on the G8. Hyundai, needs to do something with the Azera, as it's lost some of it momentum. GM, doesn't need to worry so much about that car. Of course it might be better than the 08' Malibu. I was kinda surprised the Azera, wasn't still selling a high number of cars. Sales aren't poor at 10K a month but they aren't moving 17K a month like they were this time last year.
I tell you the next couple of years are years I wouldn't want to bet on. 2010, is less than 3 short years away and I don't know what is going to happen by then. Will Ford, still be in business ? Will Chrysler ?
I however would bet money that we could witness some sort of a "correction" in most of the marketplace if we stay on this current crash course. Especially in Truck and SUV's. Yeah, like the stock-market we could have a MSRP correction because if this country keeps losing more good jobs than it creates I feel car prices in the volume segments will have to fall. Gas prices will play a major role also. I think Hyundai, in three years could force a correction. I think the currency manipulation issue will be the saving grace for the Japanese, as they have room to come down several thousand dollars on many of their models and still make a profit. The Big 2.5, do not have that luxury.
I suppose time will tell us what we would like to know now
Rocky
I had a 97' Cutlass Supreme which I loved but the car was built so crappy that I went back to the imports. You cannot build a car with the idea that after 65,000 miles the car can fall apart. I had transmission problems, door handles that broke annually when the weather got cold. The best part of the car was the engine a 3.1 V-6. I got good gas mpg and it had excellent get up and go.
My local Honda dealers do nothing but advertise low lease rates. Same with a lot of HOnda TV ads. Sure Honda doesnt do a lot of rebates, but subsidized leases are the same thing and HOnda does a LOT of low lease rate advertising.