GM: Not Conceding U.S. Market Share
GM: Not Conceding U.S. Market Share
DETROIT December 4, 2004; Michael Ellis writing for Reuters reported that General Motors Corp. will have a tough time posting stronger U.S. sales in December, a top GM executive said on Friday, but the automaker is determined to stop any further loss of U.S. market share.
"I would say the goal for us is to maintain and gain market share -- that is the strategy and that is the goal," Gary Cowger, president of GM North America, told reporters at a news conference on Friday.
GM officials have conceded it will be difficult for the world's No. 1 automaker to match last year's U.S. market share of about 28.2 percent, down from an annual market share of more than 30 percent as recently as 1997 and a peak of more than 50 percent annually in 1962.
Following GM's 13 percent drop in November sales, double the fall that many on Wall Street had forecast, analysts said they expect GM -- which has led Detroit's price war for years now -- to boost consumer incentives further.
But GM may wait until later in the month, when most car sales are made, to make the move and create more of a sense of urgency among buyers, analysts said.
"Car companies will likely ratchet up incentives in December to slash inventories and end the year on a strong note," said Joseph Barker, manager of North American sales analysis with CSM Worldwide.
Asian automakers, particularly Toyota Motor Corp. and Nissan Motor Co. Ltd., continued to gain market share in November.
Cowger declined to comment on GM's incentive strategy this month, but said it will be difficult to match the strong sales levels the company saw late last year.
DECEMBER SALES
"December will be tough because we had a huge December last year," Cowger said. GM's market share hit about 31 percent last December, far above its rate of about 27.3 percent so far this year.
GM's incentives fell by an average of $339 per vehicle from October to $3,519 in November, said Jesse Toprak, senior analyst with the automotive Web site Edmunds.com.
It still led the industry in spending on discounts for car buyers, however. And much of the decline in that spending was due to the fact that GM had fewer of its 2004 models in stock, which carried higher incentives, analysts said.
GM was also surprised by the low take rate on its "Lock 'n Roll" incentives program, which offered consumers the chance to lock in a low financing rate on both a new vehicle bought in November, and a second GM vehicle in a few years.
Since launching its interest-free financing offer shortly after the Sept. 11 attacks more than three years ago, GM has aggressively battled for market share with its sales incentives.
The strategy helped GM maintain its U.S. market share until this year, when it fell nearly a full point from last year.
The launch next year of 13 all-new vehicles, many in large volume segments such as the new Chevrolet HHR wagon, will help bring incentives lower, Cowger said.
"As you get more and more new product in the market, you'll see a mitigation of incentives," Cowger said.
DETROIT December 4, 2004; Michael Ellis writing for Reuters reported that General Motors Corp. will have a tough time posting stronger U.S. sales in December, a top GM executive said on Friday, but the automaker is determined to stop any further loss of U.S. market share.
"I would say the goal for us is to maintain and gain market share -- that is the strategy and that is the goal," Gary Cowger, president of GM North America, told reporters at a news conference on Friday.
GM officials have conceded it will be difficult for the world's No. 1 automaker to match last year's U.S. market share of about 28.2 percent, down from an annual market share of more than 30 percent as recently as 1997 and a peak of more than 50 percent annually in 1962.
Following GM's 13 percent drop in November sales, double the fall that many on Wall Street had forecast, analysts said they expect GM -- which has led Detroit's price war for years now -- to boost consumer incentives further.
But GM may wait until later in the month, when most car sales are made, to make the move and create more of a sense of urgency among buyers, analysts said.
"Car companies will likely ratchet up incentives in December to slash inventories and end the year on a strong note," said Joseph Barker, manager of North American sales analysis with CSM Worldwide.
Asian automakers, particularly Toyota Motor Corp. and Nissan Motor Co. Ltd., continued to gain market share in November.
Cowger declined to comment on GM's incentive strategy this month, but said it will be difficult to match the strong sales levels the company saw late last year.
DECEMBER SALES
"December will be tough because we had a huge December last year," Cowger said. GM's market share hit about 31 percent last December, far above its rate of about 27.3 percent so far this year.
GM's incentives fell by an average of $339 per vehicle from October to $3,519 in November, said Jesse Toprak, senior analyst with the automotive Web site Edmunds.com.
It still led the industry in spending on discounts for car buyers, however. And much of the decline in that spending was due to the fact that GM had fewer of its 2004 models in stock, which carried higher incentives, analysts said.
GM was also surprised by the low take rate on its "Lock 'n Roll" incentives program, which offered consumers the chance to lock in a low financing rate on both a new vehicle bought in November, and a second GM vehicle in a few years.
Since launching its interest-free financing offer shortly after the Sept. 11 attacks more than three years ago, GM has aggressively battled for market share with its sales incentives.
The strategy helped GM maintain its U.S. market share until this year, when it fell nearly a full point from last year.
The launch next year of 13 all-new vehicles, many in large volume segments such as the new Chevrolet HHR wagon, will help bring incentives lower, Cowger said.
"As you get more and more new product in the market, you'll see a mitigation of incentives," Cowger said.
posted by InvBanker at 7:23 AM
0 Comments:
Post a Comment
<< Home