Sales Discounts

[TitanTough1]

Huge discounts pay off for Ford, Chrysler, GM

July sales rise 35% at Ford, 30% at DaimlerChrysler, 20% at GM. No wonder all three say they'll keep the employee-price discounts another month. With employee-discount plans pulling buyers into Big 3 showrooms in numbers not seen in years, General Motors (GM, news, msgs), Ford (F, news, msgs) and DaimlerChrysler (DCX, news, msgs) on Tuesday extended the blockbuster promotion.

Sales numbers for July announced Tuesday showed the reason: Ford reported its sales rose 35% over July 2004, and it set a modern record for the highest monthly sales of a single nameplate by moving 127,000 of its F-150 pickups, up 64%. It was the first sales increase in 13 months for Ford.

DaimlerChrysler reported a 30% surge, and its stock hit a 52-week high on the New York Stock Exchange.

GM saw a 20% increase in July sales. In June, when it had the employee-discount boon all to itself, its sales rose 41%.

The employee discount programs essentially eliminate haggling at the dealership by offering the public the discounted price – below invoice – that company employees receive.

GM on Monday had said it would not renew the employee-discount promotion it pioneered, instead lowering sticker prices. Tuesday, the company reversed course to match its rivals in extending the programs. All of the plans had been set to expire Monday.

Import brands soared in July as well. Nissan (NSANF, news, msgs) saw sales rise nearly 20% year over year; Toyota (TM, news, msgs) reported a 12% increase. Neither offered an employee-discount plan.

All figures are adjusted for an extra selling day in 2004.

For 2005, discounts; for 2006, cheaper stickers
The official strategy at both GM and Ford remains weaning buyers off mega-incentives. According to research firm Autodata Corp., GM spent an average of $4,458 per vehicle on incentives in June, higher than any other automaker.

GM is lowering the prices on 30 of its 76 models and adding features to other models to make them more competitive. Under the new pricing strategy, the base price of the Chevrolet Malibu, for example, is $17,990, or $1,835 below the 2005 model, while the base price of the Saturn Ion sedan is $12,490, or $2,455 lower than the 2005 model.

[P's Titan]

Funny how there stock is still declining. Also, how much money are making during this ? Can't be too much with all the advertising and employee discounts.

Glad to see Nissan still selling strong and NOT jumping on this employee crap!

[HudsonValleyTitan]

I'm thinking the worry isn't so much about how much money they're making now, but how much of their stagnant 04 and 05 stock they're getting rid of. Rememebr...most dealers won't be allowed new 06 stock if they're full of 05s.

[TitanTough1]

Originally Posted by HudsonValleyTitan

I'm thinking the worry isn't so much about how much money they're making now, but how much of their stagnant 04 and 05 stock they're getting rid of. Rememebr...most dealers won't be allowed new 06 stock if they're full of 05s.

Yeah I think you mentioned something about this in the other thread. My Z71 was their last 05 in stock. Plus I really wanted to buy from a local dealer (small town)... They had already sold a few hundred trucks - their stock of 05's is sliiiiiiim pickings.