The biggest storyline right now for America’s bailed-out automakers is how little they’ve been able to capitalize on Toyota’s stumbles. While Ford and Hyundai made hefty sales gains last month, both GM and Chrysler’s performances were distinctly unimproved by Toyota’s woes. And now that Toyota is launching major incentive packages to recover lost sales momentum, Detroit has no remaining incentive to not revert to the bad old practices of incentive dependence. With GM and Ford diving into the zero-percent war, Global Insight’s George Magliano tells Automotive News [sub]:
Incentives are going to be here into the third quarter. We’re not going to wean consumers off incentives any time soon. We’re stuck with it. They’re all jockeying for position… After clunkers everybody backed off incentives. Now they’re going to the whip again
Broad incentives are hard to sustain because they are so expensive. Zero-percent is war, a product-line deal is a skirmish. Automakers are always conflicted about profits and market share, but they are opportunistic, so there will be a lot of skirmishes this year.
For us, it’s a pretty big step up, but still if you look at what the competitors spend per vehicle basis, we are still 30 percent below our competitors,