By on April 1, 2010

Edmunds [via Earth Times] has released its monthly “True Cost of Incentives” list, and GM tops the list, followed closely by Chrysler and Ford. Good thing Sergio Marchionne narrowly avoided “getting pulled into an incentive war.” That Chrysler’s sales couldn’t beat last March’s numbers even with these incentives tells you everything you need to know about the state of play in Auburn Hills. Oh, and how is GM’s incentive “leadership” supposed to jive with marketing boss Susan Docherty’s insistence [via the WSJ [sub]] that GM is reigning in its incentives? Who knows. Meanwhile, Ford’s impressive 2010 numbers have to be taken with a grain of salt in light of the Blue Oval’s continuing dependence on spiffs and fleet sales (speaking of which, fleet numbers are up 64 percent at GM, and Ford had a 30 percent-ish fleet mix in March[ via FT]). In fact, Toyota’s much-vaunted move towards incentives seems to not only have helped its sales, it may have also scared Detroit back into some nasty old habits.

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28 Comments on “GM Tops March Incentives...”


  • avatar
    jimboy

    I know you losers are desperate for readership, but saying Chrysler tops incentives again in your headline is an outright LIE. Since when does $3,359.00 beat $3,519.00? Want to talk about incentives? How about some journalistic integrity/ honesty/ remedial math? I am really sick of people (YOU) who pretend to be journalists when all you really are is media whores. This blog and it’s spread your legs staff are a laughing stock to the rest of the community. Enjoy your 15 minutes folks, times nearly up.

    • 0 avatar
      Bancho

      There’s better ways of pointing out flaws and although this place can get pretty wild there are rules.

    • 0 avatar

      Rules are not in effect in this case. Fire at will.

      And as far as media whores go, my overnight rate is $2000, paid up-front. No kissing.

    • 0 avatar
      mikey

      Wrong, wrong, wrong, and wrong again, jimboy. I’m a Detroit fan boy and a member of the TTAC B&B for over 5 years. TTAC might be a liitle import bias, but thier numbers, and journalistic integrity has never been suspect.

      Oh ya, I forgot about Farago posting photos of pre production Camaros. And then there was that whole “death watch’ thing”

      OK.. So TTAC isn’t perfect,but niether am I..But I still love you TTAC.

      Note to self…Do not drink beer in the afternoon..Do you hear me MIKEY?

    • 0 avatar
      jimboy

      Well,at 2 grand Bertie, I want a kiss!

  • avatar
    b1msus93

    What are these nasty old habits?

    And man does Chrysler suck

  • avatar

    GM’s incentive cost includes firesaling their products from “dead” brands like HUMMER, Pontiac, Saab and Saturn. A better measure would be incentive spending on the brands that they are keeping.

    • 0 avatar
      Bancho

      +1

      It would at least be nice to see this broken out to help clarify and maybe see how things might go from here on out.

    • 0 avatar
      Disaster

      Agreed. I bet there wasn’t much incentives on the new Lacrosse. GM doesn’t need to be concerned about resale values of dead brands. On the other hand, these sales do cost GM money and rob sales from their other brands.

    • 0 avatar
      Buffs Fan

      The average incentive spend is supposed to be weighted by sales — GM sold very few Hummer/Ponitac/Saturns, so it shouldn’t affect their average much. GM said their incentives were below Toyota, based on JD Power’s look at incentive spend. Does anyone have those numbers?

  • avatar
    Disaster

    Interesting to see Toyota doing so well while still offering less incentives then the domestic rivals.

    I would also be curious to see how these guys did in comparison to 2008 and 2007. Some companies did not get as hurt in 2009 as others so they can have smaller growth this year, but still do better overall.

    Also, this definitely explains why car sales surged. These incentives beat the cash for clunker incentive, and you don’t even need to find an old car to turn in.

  • avatar
    mjz

    Do you kick puppies too?

    Why can’t you give Chrysler a chance? If their new products stink, THEN knock ‘em. Considering the mess that Daimler/Cerebus left, they should be patted on the back for doing this well.

    A better headline would have been:

    CHRYSLER MARCH INCENTIVES DROP A WHOPPING 30%, SALES ONLY DECLINE 8%.

    • 0 avatar
      windswords

      It’s all about perspective isn’t it? But when it comes to TTAC and Chrysler, they only have one perspective. Maybe the “see, I told you so” for the GM death watch and C11 wasn’t enough. Maybe they want a C7 to hang on their mantel.

    • 0 avatar
      geozinger

      @mjz: Just when you thought the Daimler disaster wasn’t bad enough, the Cerberus clusterf*ck happened. (Masters of the Universe, my a$$) Then the bankruptcy. What a lousy decade it’s been for Mopar fans…

      I’m hoping that Chrysler gets a better hand dealt to them with Fiat. Unfortunately, with no real skin in the game, I’m not 100% sure about Marchionne’s intentions. Of course, I guess no one really is sure.

      A lot of Chrysler’s current line up was foisted on them by Daimler, and some of their product and engineering tie-ups are to weird to fathom, sometimes.

      I’ve jokingly thought about starting a Facebook page titled: “Can I get a million Mopar fans to pitch in $10 each and buy Chrysler back from Fiat?”

      I wonder if it would work…

    • 0 avatar
      andres33

      Chrysler is an embarrassment to the American people. Daimler and Cerebus had nothing to do with their demise. I’ve done extensive calculations and attribute Chrysler’s second failure and bankruptcy in short order 95% due to the poor quality of their vehicles.

      Since most of their vehicles only last 3 years or 36,000 miles before needing thousands and thousands if not tens of thousands in repairs, maintenance, and replacement parts (not to mention tow truck costs), people have given up on their scam and will not be defrauded again. The strategy they used, of planned obsolescence in their vehicles, back fired, and now it is they who are obsolete and will soon either get their 3rd bailout and bankrutpty, or if god willing, the tax payers aren’t dragged into the mud a 3rd time, Chrylser will disappear forever in the 3rd failure and never to come back again. That would be a good thing for the American people.

    • 0 avatar
      porschespeed

      windswords,

      Please, I wanna be wrong. Really. I wanted them to change, give me a product I (and more Americans) would be interested in. We’ve been bitching and voting with our wallets since the mid-70s. What do we get? Lutzes and Lidos telling us that crap is actually Nutella, we just don’t realize it.

      But GM (and Chryco) have yet to change the failed corporate culture that brought them to well over the brink. After the half-dozen disingenuous “we’ve changed this time, really” campaigns I don’t cheer them to oblivion. But, there’s nothing else that will help them, short of liquidation and reformation of the useful pieces.

      It’s like cutting off a heroin junkie – you feel bad doing it, it’s gonna hurt them, they’re gonna keep crying. But, this isn’t going get any better till they kick, and if they stay on track, they are going to die. Sooner than later.

  • avatar
    th009

    “Susan Docherty’s insistence [via the WSJ [sub]] that GM is reigning in its incentives?”

    Well, clearly GM reigned as the king of incentives in March. But that’s because they didn’t rein in their incentives.

  • avatar
    Juniper

    Cut the fleet crap, when all or most manufacturers list it fine. Other than that it’s TTAC Bullshit!

  • avatar
    Juniper

    OK, so what are Toyota’s fleet sales?

    • 0 avatar
      Jack99

      I’d like to see fleet numbers myself.

      I’ve seen plenty of Hyundai haters parroting the same old “Hyundai relies on fleet sales for its growth, therefore its growth isn’t legitimate” line again and again with absolutely no numbers, flow charts, or breakdowns beyond the questionable 30% figure from 2006. But in spite of all that, the cars I’m seeing growth in aren’t fleet cars. The last time I visited a rental lot to help my sis pick up her car, I saw tons of Chevy Cobalts, a couple of Hyundai Accents, some Toyota Yarises, and a few other compact cars.

      Check here:

      http://www.thetruthaboutcars.com/toyota-sales-enjoy-intended-accelleration-up-41/

      Yaris sales actually declined while the Corolla jumped. The entire Scion line took a dive while the Camry and Prius saw strong growth.

      I don’t like taking negative overtones with my comments. But expect this to hurt resale values later on down the road. I’ve always told my friends that Hyundai purchases are good if you don’t care about having the “bestest” ride quality, brand name, and resale value. Nowadays in light of Toyota’s lack of style and increasing blandness in the Corolla and Camry, that’s the line I’m using on them. But I must say the Prius is still to this day one cool car.

  • avatar
    CarPerson

    No Subaru?

    Let me help with that…

    “Dude, pick the one you want and I’ll do the paperwork. You don’t like it, there’s the door over there. Use it.”

  • avatar
    Jack99

    As a friend of mine once said when she saw me with spiked hair and in a tux on prom night: “Are my eyes deceiving me?!”

    But seriously, since when are Hyundai’s incentives lower than most of the industry’s average? I understand Honda. I’ve heard time and again that Honda maintains a strict policy of limiting incentives recession or not to protect its resale value.

    But man…Hyundai’s lucky to have a guy like John Krafcik at its helm. The guy’s a true gunner.

    “Krafcik said Hyundai has stayed away from the industry-wide discounting spree, reducing incentive spending in March from February. Hyundai’s U.S. market share still rose to the highest level of the year at nearly 5 percent, he said.”

    http://www.reuters.com/article/idUSN3123427520100331

    Admittedly I’ve become somewhat of a fan of Hyundai’s business model in the recent months. But if I were the calling the shots at Hyundai USA, I would’ve considered cutting that age old Hyundai practice of offering generous incentives a ballsy move. Counterintuitive at best. I’ll go out on a limb and venture to say Hyundai’s probably aiming to take a page straight from Honda’s playbook by offering few or no incentives on the 2011 Sonata to keep resale values high!

  • avatar
    NulloModo

    The problem with these numbers is that they are completely bogus. As far as I can tell, these only show incentives that are known to the general public. The import brands (Toyota and Nissan in particular) are very fond about giving hidden incentives, or money directly to dealers with the express intent it is to be used just like rebates to discount cars, but they have the option of just keeping it for themselves if they can trick a customer into paying a higher price.

    Mark-up on vehicles is fairly similar across most makes, Ford is around 6% from invoice to MSRP, GM is a bit higher, and some luxury makes are a bit higher than that even, but it means that all things being equal, Toyota shouldn’t be able to sell a Corolla for less than a Focus if they have less incentives. However, Toyota, Nissan, and Hyundai regularly advertise discounted vehicles that, if they aren’t receiving some hidden incentive money, would mean the dealer would be losing thousands of dollars per car on the front end, which just doesn’t happen.

    • 0 avatar
      windswords

      “The import brands (Toyota and Nissan in particular) are very fond about giving hidden incentives, or money directly to dealers with the express intent it is to be used just like rebates to discount cars,”

      This is exactly the same method they used for years when it came to “service campaigns” that were actually recalls. They repaired the car “for free” as a service to the customer generating all kinds of good feelings. Hidden warranties abound. Then they can claim that their cars are better than the competition. “Look Ma, no recalls”!

  • avatar
    joe_thousandaire

    “and how is GM’s incentive “leadership” supposed to jive with marketing boss Susan Docherty’s insistence [via the WSJ [sub]] that GM is reigning in its incentives?”

    Well according to the data here GM has reduced incentives $1200 or about 1/4 from record highs a year ago. So I would say it jives moderately. If they can repeat that pace in another 12 months, that would leave them well below the (current) industry average.

  • avatar
    Z72_Silvy

    Notice Ford’s incentives not much better than GM’s. And, since Ford (still) has to follow GM, and GM has less debt than Ford, GM is playing hardball with Ford by forcing Ford to incentivize more than they want. In essence the heavy GM incentives are killing Ford. An excellent strategy by GM.

  • avatar
    gmbuoy

    Using this Edmonds chart to infer anything intelligent about incentive activity is like trying to use the Average Temperature of the month to infer what the weather was like. The metric ain’t carrying enough information.
    1) Relative segment participation. More is spent on Full Size Crew Cabs than on Sub compact cars. That alone drives GM and Ford’s number up and Toyota’s down.

    2) Amount of margin in each vehicle at the factory and and the Dealer Level, More Mark-up to Mark Down drives the difference, if the Toyota has 8% margin and the Cobalt has 10% that drives incentive behavior.

    I suspect edmonds sells the detailed data and these “news” releases are the trolling.

  • avatar
    CatFan78

    All the Toyota haters must be having trouble dealing with the facts.

    Even after all the media SUA hype, Toyota OUTSELLS GM and Ford in consumer sales. GM and Ford sold 40K of their March vehicles to Fleet.

    And Toyota still is spending LESS than the other auto makers in terms of incentives.

    Consumers by far like Toyota, regardless of the media SUA hype.


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