#incentives
Smart Concedes Defeat, Starts Captive Lease Program
Chrysler's Conundrum
Chrysler’s sales fell 36 percent last year, as bankruptcy and some of the weakest products on the market conspired to keep sales and market share trending downwards. CEO Sergio Marchionne figures Chrysler’s slide has hit bottom, and indeed his turnaround hinges on considerable improvement over last year’s dismal numbers. How much improvement? Marchionne tells the Freep that ChryCo needs to sell 1.1m vehicles in the US next year, an 18 percent improvement on 2009’s number, in order to reach his break-even projections. Worldwide, Chrysler needs to sell 1.65m vehicles, or 27 percent more than last year. Given the downward sales and market share momentum, the overall uncertainty of the US market, and the lack of new products until the end of this year, reaching those volume numbers won’t be easy. Especially because Marchionne refuses to cut any corners.
Dealer Arbitration GM's "Top Challenge" For 2010
GM has a tough row to hoe in 2010, with the launches of key products like the Cruze and Volt going on sale, an IPO to worry about, and a sales slide (down 30 percent for 2009) to reverse. Still, according to GM’s new North American boss Mark Reuss, navigating the congressionally-mandated dealer arbitration is the top challenge of the coming year. At a speech last night, Reuss told reporters from Automotive News [sub] that:
I welcome this as an opportunity for GM and the dealership network to go through a change in our network with integrity,
As opposed to the arbitrary bankruptcy-era dealer cull?
Inside GM's December Sales
Speaking to Bloomberg yesterday, GM Sales Boss Susan Docherty called December’s sales results “very encouraging.” Her argument: heavy fleet sales in December 2008 explain why December 09 results look worse by comparison. But spinning sales results as the product of conscious fleet percentage reductions is just one longstanding GM tradition that Docherty indulged in: talking points touting falling incentives and improved inventory weren’t far behind. None of which is necessarily indicative of a satisfactory performance. In fact, if you dissect the spin, it’s clear that what lies beneath is not nearly as attractive as the PR would have you believe.
GM Launching Dead Brand Fire Sale
According to Reuters, GM has sent a letter to its dealers offering $7,000 for every new Saturn or Pontiac they can move to a rental or service fleet between now and January 4. The plan would essentially make dealers the first buyer of the remaining Pontiacs and Saturns, which would then be operated as fleet vehicles or be sold as low-mileage used cars. In any case, the single objective is clear: get those dead brands off the books at all costs. With 7,900 vehicles left at Pontiac as of the 14th of December and upward of 5,000 left at Saturn as of the beginning of the month, the cost to GM could easily approach $100m. But as they say in the advertisements, their loss is your gain…. as long as you’re interested in one of the G6s or Auras that dominate the dead-brand straggler inventory. Where’s Oprah when you need her?
Ford of Europe: A Paper Tiger?
While Ford is slowly but surely gaining traction in North America and China, Europe is storming ahead. Over at paddocktalk.com there’s report on Ford of Europe’s latest sales, which jumped 19.8% in November. This marks Ford’s sixth consecutive volume increase, resulting in a 9.1% year to date market share. “November was another month with outstanding volume gains for Ford of Europe”, said Roelant de Waard, Ford of Europe’s Vice-President for Sales. “Having the right products at the right time is paying off, and this is why we’re continuing to strengthen our position as the clear No.2 choice for customers in the European auto industry.” A key point included how 63% of their sales went to retail customers, which was an increase of 13%. Increase in sales? Increase in retail customers? Increase in market share? It all sounds great! Until you dig a little deeper.
Chrysler's Latest Metal-Moving Trick: Retiree Leases Are Back
Chrysler: No Market-Share Miracles
Chrysler CEO Sergio Marchionne isn’t bothered by his firm’s sliding market share, which have declined to the point where Honda will certainly surpass them to become the number four automaker in America. At least that’s what he keeps saying, and Automotive News [sub] went ahead and made it a headline. If dealers are “expecting us to call them up and give them a $6,000 check for every new vehicle, they won’t get the call,” Marchionne joked recently in the Detroit Free Press.
Denmark EV Incentive: $40k and a Parking Spot
Along with Israel, Denmark is one of the first countries to sign on to Project Better Place’s attempt to establish a viable electric car infrastructure. And as with all early adopters, Denmark is paying a pretty price for the experiment. The country is spending $100m on infrastructure, including charging points and battery-swap stations. Moreover, Better Place’s partner, public utility Dong Energy, is trying to run the new EV infrastructure entirely on wind power, which is already the source of 20 percent of Denmark’s energy. “We’re the perfect match for a windmill-based utility,” Better Place founder and CEO Shai Agassi tells the NY Times. “If you have a bunch of batteries waiting to be charged, it’s like having a lot of buckets waiting for rain.” Despite the close government involvement in the project, Danes are still wary of making a wholesale switch to EVs, prompting the government to offer $40,000 in consumer incentives for electric vehicles, as well as free parking in downtown Copenhagen. Though there’s plenty of skepticism in Denmark about the plan, that incentive is expected to make a huge difference.
Chrysler Bumps Incentives. Again. Still.
Smart Cars Play The Incentive Game
May the Best $500 on the Hood Win
We don’t have any numbers yet on GM’s 60 day money-back guarantee, but according to GM dealers speaking to Automotive News [sub] it’s not generating a lot of interest. “If [customers] like the car, if they test drive the car, most of the people would rather have a car to keep,” explains one dealer. Which makes a certain amount of sense, and which is why dealers insist that the number of buyers taking GM up on the offer doesn’t matter. “It’s more important to talk about the money-back guarantee. It conveys confidence in the vehicles,” says another dealer. “It’s not about the deal, but rather it’s about the world-class products.” That sounds good in principle, but the reality is that it actually is all about the deal. Again. Still.
Update: Details of US Car Scrappage Scheme Emerge
In a follow up to E. Niedermeyer’s previous post, details have emerged about the scheme to give rebates to buyers who trade “clunkers” for new, fuel-efficient vehicles. FT.com (Financial Times) reports that the program will cost taxpayers about $4 billion and will spur, according Brian Johnson, an analyst at Barclays Capital, the sale of 3 million units in the “near term” (whatever that means). With the US’ SAAR projected at approximately 9 million, this is a very optimistic prediction.
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