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Old 10-14-2007, 01:17 AM   #1
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Chrysler, GM Gain Strength in Sales

Chrysler, GM gain strength in sales
Results in showroom boost their optimism

October 13, 2007

BY SARAH A. WEBSTER

FREE PRESS BUSINESS WRITER

Total U.S. sales might be down for all of Detroit's automakers this year, but results in America's showrooms reveal underlying strength.

General Motors Corp. enticed more consumers into dealer showrooms in the third quarter with hot new vehicles like its Buick Enclave and Cadillac CTS, instead of relying on fat rebates.

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Chrysler got a bigger percentage of everyday buyers, too, although it did so with bigger rebates that will eat into profits.

While Ford Motor Co.'s six brands struggled overall, its traditional American brands -- Ford, Lincoln and Mercury -- held their own. And that might make its road to recovery a smoother one from here on.

In a development that is good for Michigan, all three Detroit automakers can find some good news in their performance at retail, where consumers buy vehicles in dealer showrooms.

According to third-quarter retail sales data provided exclusively to the Free Press by the Power Information Network, GM and Chrysler improved compared with the third quarter of 2006. Ford, meanwhile, posted a big decline, but has since stabilized its position in the retail market.

Retail sales are more profitable and exclude sales to daily rental companies, government and businesses, which are heavily discounted and generally less desirable.

The improving performance comes even as retail sales nationwide are down an estimated 3.2% this year, a consequence of a national housing crisis and growing concern over gas prices. And it also means that Detroit's share of the retail market, which now stands at 47.4%, might have bottomed out and could improve in the future.

"It appears that they have stabilized the situation," said Tom Libby, senior director of industry analysis at the Power Information Network, a subsidiary of J.D. Power and Associates, who didn't recommend celebrating just yet.

"The future is wide open," he said, "Toyota, Honda, Nissan and Hyundai are still very competitive operations."

GM picked up 0.4 percentage points of retail market share, for 22.4% of the U.S. retail sales. Chrysler LLC, meanwhile, picked up 0.3 percentage points, for a total of 10.9%, Power said.

And while Ford Motor Co.'s overall retail share dropped 2 percentage points, to 14.1%, the automaker's critical North American division has apparently stabilized its share of the retail sales market this year. Excluding the Jaguar, Land Rover and Volvo brands -- which Ford is exploring the sale of -- the company's Ford, Lincoln and Mercury brands have maintained a 13% market share most of the year.

That's the bottom end of the range of U.S. retail share that is needed under the company's turnaround plan, which calls for closing 16 plants, eliminating 44,000 jobs and revamping the company's lineup with a goal of profitability in 2009. If the company falls below that, more cuts might be needed. But so far, Ford is holding on tight.

Ford's top sales analyst, George Pipas, said the automaker has hit the 13% mark for seven months since December, with three months falling short of that mark, in a tough market.

"We've been performing in the retail market at a very consistent level," he said. "This is a very positive first step toward our ultimate goal."

Another positive sign in the numbers, for GM and Ford anyway, is that these retail gains were made with lower discounts.

GM dropped its incentives, such as cash-back rebates and special financing deals, by $200, or 6%, in the third quarter versus the same period a year ago, according to an analysis provided by Autodata Corp. of Woodcliff Lake, N.J..

Automakers don't publicly release their incentive spending, so independent companies such as Autodata provide estimates based on market intelligence.

Ford, meanwhile, dropped incentives by $477 in the quarter versus a year ago, a substantial 11% cut, Autodata reports.

Paul Ballew, GM's executive director for global market and industry analysis, said the company's new products, such as the Buick Enclave, Cadillac CTS and GMC Acadia, are being bolstered by a marketing strategy that sets prices closer to what consumers will pay. That requires fewer discounts and gets lower-priced GM products on customer shopping lists from the get-go.

"We feel like our go-to-market strategy is really helping us," Ballew said.

At Chrysler, the numbers tell a different story.

The Auburn Hills-based automaker ramped up its incentives by $632, or 18%, in the third quarter versus the same period a year ago. So, its gains should be looked at with some caution.

Art Spinella, president of CNW Marketing Research in Bandon, Ore., said Chrysler is becoming known as the "discount house" on the market. He said the deals mean they are gaining sales but "giving away a larger percentage of their profits."

Steven Landry, executive vice president of North America sales, marketing, service and parts at Chrysler, said Chrysler's incentives have grown because the company followed GM into the incentive market on full-size pickups -- a move that helped sales of its Dodge Ram.

But Landry also said the company believes it picked up more retail market share than PIN reports, a total of 0.45 percentage points.

"We're really happy with what happened in the third quarter," he said.

The third-quarter data indicate that the sales Detroit automakers are losing are mostly the fleet sales they want to cut back on anyway, because they provide little profit and hurt resale values.


Contact SARAH A. WEBSTER at 313-222-5394 or swebster@freepress.com.
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Old 10-14-2007, 09:45 AM   #2
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Another positive sign in the numbers, for GM and Ford anyway, is that these retail gains were made with lower discounts.
Excellent!
Awesome News, TAG. Thanks This will be a good day!
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Old 10-14-2007, 10:22 AM   #3
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Great news for GM. Keep it up :]. Honestly I really hate import cars, apart from exotic euro ones lol.
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Old 10-14-2007, 10:45 AM   #4
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The third-quarter data indicate that the sales Detroit automakers are losing are mostly the fleet sales they want to cut back on anyway, because they provide little profit and hurt resale values.
This suprised me too. I am suprised that they would want out of fleet sales. I would imagine that you could build numerous vehicles the exact same way which would cut back on costs and sell'em at a good price (not too discounted) to rental companies and more. Hmm...guess that's hurting the bottom line?

Now...if Dodge, Ford, or GM could build an ultimate police car that looks awesome, holds up under regular pursuit driving, and costs nearly nothing to maintain, I'd be set. I really want to see that fleet Charger from Dodge. And hurting sales??? If the Crown Vic is going to be phased out over the next two years like we've heard, our dept is going to have to look for another cruiser....hence, the Challenger. The dept would have to buy a good 1300 Challengers or so to start off w/. That's just for one dept. Fleet sales couldn't be too bad w/ that many depts across the country needing that many cars. I'm suprised someone would want to get away from that.
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Old 10-14-2007, 11:02 AM   #5
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Since they're being given to government (public) departments, I'd imagine that there would be a decent sized discount. I could see how that could affect the cost per vehicle and overall sales.
You've got the right idea, with building more cars = cheaper production prices, but if I remember economics class - there starts to be a negative turnaround...where making such a number of cars isn't worth it anymore.

Now, if it's hurting sales, All I know, is that if I ever see a Camry chasing me - I'll pull over, but with the confidence knowing I could easily get away (not really, of course)
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Old 10-14-2007, 11:33 AM   #6
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hey, some of those new Camry's come with a whopping 268 hp. Be afraid.

Back on topic, its great that detroit is recovering. I think that the dark days are gone. All that needs to happen now is for word to get out (and have people listen) that all GM cars are not shit, and that all Japanesse cars are not perfect.
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Old 09-04-2008, 07:18 PM   #7
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You know what I can see Tag?? A G8 GT cruiser package for some reason. That wouldnt be too bad and comfortable for you guys!

Good thing the big 3 are doing better. The fleet sales is a HUGE sales number and to lose all that and still do ok is good.
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Old 09-04-2008, 08:07 PM   #8
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Good thing the big 3 are doing better. The fleet sales is a HUGE sales number and to lose all that and still do okay is good.
You do know you revived a thread that is almost a year old, don't you?
All those figures are 2007 sales compared to 2006 sales.
2008 sales are way down. Not a good thing at all.
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Old 09-04-2008, 08:15 PM   #9
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I really want to see that fleet Charger from Dodge.
like this?


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Old 09-04-2008, 08:16 PM   #10
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Awww WTF. I searched for GM sales numbers and even made sure to look at the dates. Damn. I failed myself. :(:(
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