Stop The Presses! GM Making Money With A Compact Car!
By Edward NiedermeyerSeptember 8, 2008 - 1,861 views
Though GM’s new Cruze is likely to qualify for taxpayer funded “efficiency retooling” money, its predecessor the Cobalt is finally coming into its own. Automotive News reports that transaction prices and profitability are headed up for the Cobalt. Average transaction prices for the Cobalt rose $775 since mid-April, thanks to surging interest in one of GM’s most fuel-efficient cars. And the upswing in Cobalt-generated revenue is turning Detroit’s argument that it can’t make money on small cars on its head. GM’s marketing manager for small cars and crossovers, Brian Brown, says profits on the Cobalt are up six percent since 2007. “I don’t think anyone thought this shift of moving into smaller, more fuel-efficient vehicles would be as dramatic and happen as quickly as it did,” Brown tells AN. “I have to laugh: In the last 90 days, one of the top five trade-in vehicles for a Cobalt is an F-series pickup.” Please note that Brown is laughing about getting trade-ins from a competitor’s truck rather than his company’s total inability to see this one coming. GM added an extra Cobalt shift in August, to keep up with the 9.6 percent (supply limited) increase in Cobalt sales on the year, which still lag behind booming sales of Ford’s Focus. Sales are doubtless being helped by the addition of the fuel-efficient (25/36 mpg) Cobalt XFE model, while sales of fully-loaded models are helping profitability. Taken together, the trend is clear: well-equipped, fuel-efficient small cars can sell in volume and turn a decent profit. If only Detroit had realized this a decade ago. Everybody else did.
Posted in Incentives | Industry | Lutzie | News Blog | 9 comments 
“Cadillac Employee Pricing” Huh?
By Jehovah JohnsonAugust 28, 2008 - 2,287 views
My time writing for TTAC is strictly limited. Farago asked me to pinch hit while he's otherwise engaged. As soon as this site's founder returns from his light bulb changing duties, I'm going back to my regular, better-paying job. So while I've got the floor, I'd just like to share a revelation…. I heard a radio ad today for "Cadillac employee pricing." Prior to that moment, I hadn't really given much thought to the concept of Caddy opting-in to GM's overall firesale. Not until the pitchman assured me "you pay what Cadillac employees pay." And then it hit me. Why would a Cadillac buyer want to buy a car that the people who build them can buy? I mean, if a Cadillac employee can afford a Cadillac, where's the status in that? At the risk of having my foul-mouth censored yet again, that brand is so screwed. Upmarket my ass. And why in God's name do they have to tell everyone about it?
Posted in Incentives | News Blog | 25 comments
Buy A Routan, Get A Slush Fund
By Edward NiedermeyerAugust 22, 2008 - 2,067 views
Not content to simply rebadge a Chrysler minivan, Volkswagen has putting on a brand-destruction clinic by pairing its Routan with a brand new marketing gimmick incentive. If you inexplicably want to pay extra to have a VW badge on your Dodge Caravan and put a down payment on a Routan, VW will give you $1,500 back. Except that it won't. The Wall Street Journal explains: "The money — held by Upromise Inc., a subsidiary of SLM Corp., which also owns Sallie Mae Bank and is the largest maker of college-funding contributions– can then be moved into a college savings fund known as a Section 529." This would be bad enough if VW were simply admitting (via cashback) that its cynical Chrysler rebadge is DOA, but instead it's offering an incentive that makes Chrysler's "$2.99 gas" gimmick look reasonable. The weirdest part? VW claims that 6k buyers have already signed up for the offer. But with analysts projecting Routan sales capacity of 20k to 40k, Volkswagen has lots of suckers still to round up. Let's just hope that claiming a single-digit-percentage slice of the shrinking minivan market is worth the epic brand dilution that the Routan– and its ridiculous incentive– are sure to cause VW.
Posted in Incentives | News Blog | 25 comments
GM Cuts Dealer Recognition Programs
By Frank WilliamsAugust 11, 2008 - 2,233 views
GM dealers are catching it from all directions. The General cutting back on leasing (with a very sharp knife) even as the troops wait for central command to fix the mix, And now the corporate mothership's gutting the dealers' GM Mark of Excellence 2008 Recognition Programs. A message to dealers outlined the "difficult" changes that resulted in canceling "select rewards" but added new cheaper incentives. Travel rewards are toast. In their stead: prepaid $1k debit cards and "exclusively yours®" reward points. "GM PerQs" are also gone, whatever the Hell they are. On the positive side, GM's cut the dealers' monthly enrollment fee by 50 percent. However, any refunds for prepaid feeds will "be applied to the Dealer's Open Account." Click here for a PDF of the complete communique. If a GM dealer or an industry-savvy member of our Best and Brightest can parse this for us, we'd be much obliged.
Posted in Dealer News | Incentives | News Blog | 19 comments
GM Ramps-Up the Rebates: 0% on Z06 and More!
By Frank WilliamsAugust 1, 2008 - 2,135 views
Never mind what they said before. GM is joining Chrysler on the huge-incentives-for-2008-trucks bandwagon. Starting today, they'll bump the rebates on GMC Yukons, Yukon XLs, Chevy Tahoes and Suburbans from $2k up to $6k. And get this– the Hybrid models are included. Envoys and Trailblazers will get the same $6k discount, with another $2k tossed in as a lease "pull-ahead" bonus. Avalanches and crew cab/extended cab trucks have $5k cash on the hood. In lieu of the rebates (or in addition to, in some cases), they're also offering low-to-no-percent-interest financing. On the car side, Chevy's offering 0 percent financing for 48 or 60 months on Corvette coupes (including Z06) and convertibles, respectively. Pontiac is bribing offering buyers a $1k bonus on the G8 sedan. Other GM models offer varying interest rate and/or nominal cash back offers. However, according to Automotive News [sub], GM spokesman Pete Ternes warns these figures could change "after GM releases its [Q2] earnings." If anything, you can probably expect them to sweeten the deal in a last ditch, damn-the-profits attempt to clear the '08s from dealer lots.
Posted in Incentives | News Blog | Sales | 35 comments
Dodge Ram Bargain Basement Prices Explained
By Frank WilliamsJuly 29, 2008 - 633 views
How can Dodge dealers offer trucks for 50 percent off of sticker price, as several have done in the past month? Money from the mother ship. Right now, Chrysler is offering up to $5k - $6k rebates to customers buying a Ram 1500. At the same time, ChryCo's kicking-in up to an additional $9.5k in "dealer incentives." The extra cash is a desperate move to clear th decks before the new Ram arrives; helping dealers to do what's got to be done to sell their moribund Rams without going out of business (ostensibly). So when you see a $35K Ram for $17.5K, Chrysler's subsidizing the bulk of the difference to the dealer. Great for generating dealership traffic, great for bargain hunters. Not so great for Chrysler's finances or future.
Posted in Dealer News | Incentives | News Blog | Sales | 21 comments
Question of the Day: How Low Will They Go?
By Frank WilliamsJuly 28, 2008 - 199 views
Last week, I pointed out that there are a lot of brand new trucks sitting on U.S. dealer's lots gathering dust. I illustrated the fact with an ad from a Dodge dealer selling Ram Quad Cabs for 50 percent off manufacturer's suggested retail price (MSRP). As bad off as Dodge is with their 160-day supply of Dodge Ram full-size pickup trucks, they didn't hold a candle to Nissan's 489-day supply of Titans. An email from Cleek tells us that a Nissan dealer in Rock Hills, SC took matters into his own hands this past weekend. He's advertised 45 percent off MSRP sale of pickups, vans and SUVs. It looks like massively discounted truck clearance sales may be the wave of the immediate future. So far, the biggest discount we've see is 50 percent. How low do you think they'll have to go to clear inventory as the model year winds down and inventory piles up? How long before we see brand new pickups for under $10k? (God help light truck residuals.) Have you seen any dealers in your area offering huge discounts like these on trucks, vans and/or SUVs?
Posted in Dealer News | Incentives | New Cars | News Blog | Sales | 32 comments
Warren Mayor Has the Answer to Detroit’s Problems
By Frank WilliamsJuly 25, 2008 - 50 views
The mayor of Warren, MI has the answer to The Big 2.8's woes. The MacComb Daily reports that in a letter to the Michigan Congressional delegation, Mayor James Fouts called for the reinstatement of the federal income tax deduction for interest on auto loans. "More new vehicle sales means more jobs, less unemployment and lower government costs to assist the unemployed," Hizzoner reasoned. Representative Candice Miller thinks "the mayor's idea is very creative." What neither of them seem to realize is that all of the Detroit manufacturers have offered 0% interest rates– and these promotions haven't exactly set sales records. Deducting the interest wouldn't have any effect on payments, and that's what floats buyers' boats. Also, Mayor Fouts better be careful what he asks for. The resulting legislation would be industry-wide. It would likely hurt the American manufacturers more than it would help them.
Posted in Incentives | Industry | News Blog | Politics | Taxes | 13 comments
It’s a Truck Buyers’ Market
By Frank WilliamsJuly 22, 2008 - 249 views
It sucks to be a Chrysler brand franchisee right now. Trucks and SUVs are piling up on lots as dealers try to come up with ways to clear the inventory before the '09 models start rolling in. They have their work cut out for them. At the start of July, Chrysler/Dodge/Jeep dealers had a 160-day supply of Rams gathering dust. If that weren't bad enough, the stores have enough Nitros to last 143 days and enough Aspens to last a lifetime. I mean, 218 days. The Jeep Wranglers they couldn't keep on the lot just a year ago are now piled up 129 days deep. With an average of only 16 truck sales per Dodge franchise, 10 per Jeep franchise and four per Chrysler franchise in June, it may take them a while to dig their way out. But, as they say, misery loves company. Honda dealers are sitting on a 160-day supply of Ridgelines and Mitsubishi dealers are dealing with a 222-day supply of Endeavors. Nissan blows them all out of the water, though. If a 215-day supply of Xterras, a 229-day supply of Armadas and a 247-day supply of Pathfinders aren't enough, the "Lot Queen" crown goes to Titan: there's a four hundred eighty-nine (yes, 489) day supply of the Mississippi-made haulers sitting around. Blow-out clearance sales can't be far behind.
Posted in Incentives | Industry | New Cars | News Blog | Sales | 40 comments
Nevada Brothel: Spend $300 on a Hooker, Get $50 Gas Card
By Justin BerkowitzJuly 9, 2008 - 298 views
Gentlemen, start your engines. And head out to Nevada. The Shady Lady Ranch, located in a trailer 31 miles north of Beatty, Nevada, is offering a promotional sale. To cover the cost of gas for the 150-mile drive from Las Vegas, if you spend $300 at the legal brothel, they'll throw a $50 gas card your way. Three hundreds bones buys you an hour with one of their shady ladies, including (according to the website) Rio, Electra, and Dakota. In the first week, they gave out $1000 worth of gas cards. The downside: the 40-minute "quick man" special ($200) does not qualify customers for the gas rebate. As we already know, the cost of diesel has been pounding Nevada's brothel industry, especially in respect to truckers' custom. While this "let's keep America, uh, smiling" campaign may not solve the transportation-to-hookers problem, it should at least soften the blow. So to speak.
Posted in Fuel Economy | Incentives | News Blog | 16 comments
POWERED