July 6, 2005

NOTHING COSTS MORE THAN IT USED TO:

Forget 'Star Wars.' Welcome to 'Car Wars.': As automakers follow GM's deep-discount strategy, consumers will reap the rewards. (Paul A. Eisenstein, 7/07/05, The Christian Science Monitor)

The auto industry's price wars will hit new highs in the weeks to come, with each of Detroit's Big Three launching aggressive new incentive programs covering virtually every model they make, discounts on some slow-selling products topping $10,000.

Following weeks of internal debate, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group moved to match the steep discounts offered by General Motors Corp. after it announced it would renew its "Employee Discounts for Everyone" program. A key reason: In June, GM's campaign generated a staggering 46 percent increase in year-over-year volume, sending the struggling automaker's sales soaring to their highest levels since 1986.

Industry incentives have steadily grown in recent months, as domestic manufacturers struggle to reverse declining market share and clear bulging inventories. But even foreign imports have had to expand programs in a bid to remain competitive.

These are "absolutely" great deals for consumers, said automotive analyst Joe Phillippi, of AutoTrends Consulting, in Short Hills, N.J. "For anyone thinking about buying in the next 12 months, with these kinds of deals, they'll be likely to move now."


While the Fed fights inflation....

Posted by Orrin Judd at July 6, 2005 6:03 PM
Comments

GM can't go broke fast enough.

Posted by: David Cohen at July 6, 2005 6:09 PM

Sure GM loses money on every sale...but they'll make it up in volume!

Posted by: Foos at July 6, 2005 6:17 PM

"For anyone thinking about buying in the next 12 months, with these kinds of deals, they'll be likely to move now."

Um. OK, I'll bite. So, what will they have to do to get me to buy another one 12 months from now?

Just wait until the Ch. 11 when Creditors go after the "deep discount" car buyers under the auspices of "fraudulent conveyance."

Posted by: John Resnick at July 6, 2005 6:23 PM

Used Car and Lease Return guys must be HATING this too.

Posted by: at July 6, 2005 6:28 PM

How is the world are they going to fund that pension liability?

Posted by: kevin whited at July 6, 2005 7:25 PM

Kevin:

"Ms. President, Rick Wagoner on line two"

Posted by: jim hamlen at July 6, 2005 8:49 PM

Plus the 100% employer-paid health care benefits.

Posted by: Gideon at July 7, 2005 8:46 AM
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