Thread: In Latest Attempt To Boost Sagging Sales, GM Once Again Offe

In Latest Attempt To Boost Sagging Sales, GM Once Again Offering Interest-Free Financing On Numerous Models

by Tyler Durden
03/02/2011 17:59 -0500

The "subprime" vehicle maker is back to its old bag of tricks - of the variety that ultimately resulting in its bankruptcy. After Zero Hedge had been pointing out for months that GM's sales number are in small part a function of its "inventory stuffing" gimmick, http://www.zerohedge.com/article/gm-con ... -ipo-price which has seen the number of cars held by dealers explode over the past 12 months as seen in the linked chart, http://www.zerohedge.com/sites/default/ ... bruary.jpg leading us to speculate that GM is essentially recreating the AOL "channel stuffing" strategy that worked out oh so well, we now get confirmation that things are in fact far worse than even we had expected.

Bloomberg reports that "General Motors Co. is offering buyers interest-free financing on some 2011 models after the company increased discounts and incentives to lead all major automakers’ U.S. sales gains last month." http://www.bloomberg.com/news/2011-03-0 ... going.html

As of yesterday desperate car buyers who can't rub two dimes together, can drive to the local unemployment office in the luxury of their brand new Chevy Imapala, or alternatively pick a just as worthless Chevy Malibu, HHR WAgon, Traverse SUV, as well as a Silverado, Colorado and Avalanche pickups, which are now offered at either 72 or 60 months of interest-free loans. "The 60-month deal also applies to the Buick Enclave and GMC Acadia SUVs and Sierra pickups." That pretty much covers the entire line up. And that's not all: "GM raised discounts 12 percent from a year earlier to an estimated $3,732 per vehicle last month, the most among major automakers and 45 percent more than the average, according to researcher Autodata Corp." As Jeremy Anwyl, chief executive officer of Santa Monica, California-based Edmunds.com summarized it all too well: "GM’s rhetoric has been saying one thing -- discipline, discipline, discipline -- and then their actions have been going completely in another direction." And as the stock, which is now firmly below the IPO prices indicates, the direction is a given: down. It is time for another poll (now that the one about the IPO price floor has been resolved): how long before GM files Chapter 22?

More on what is increasingly an act of desperation by the world's worst automaker, which not even Phil Lebeay, whose alleged IPO stock overallotment is now underwater, can spin his way out of.

GM doesn’t comment on specific incentive programs, Tom Henderson, a spokesman, said today in a telephone interview. GM still has the highest average transaction prices among mainstream automakers according to J.D. Power & Associates and GM data, he said, without giving specifics.

Reduced-rate financing also is being offered on other models, such as 2.9 percent, 60-month loans on the Chevy Cruze compact and 3.9 percent, 60-month loans on the Cadillac SRX, according to AIS.

And the truly sad thing is that GM's desperation-time strategies borne out of Obama's bizarro corporatofascist capitalism, are about to drag that far more viable carmaker, Ford, into the ground:

The automaker’s discounts may force rival Ford Motor Co. to increase its sales incentives, Anwyl said. GM’s U.S. sales in February climbed 46 percent, giving it a 20.8 percent share of the market last month, topping Ford’s 15.7 percent and Toyota Motor Corp.’s 14.3 percent, according to in Woodcliff Lake, New Jersey-based Autodata.

Ford Chief Executive Officer Alan Mulally has emphasized profitability over market share, with Ford boosting prices in February by $700 to $800 a vehicle from January, George Pipas, the automaker’s sales analyst, told reporters on Feb. 28.

“Up until three months ago, Ford was the one everybody was talking about,â€

RELATED

GM leads auto sales jump with 49% increase

March 1, 2011
Chrysler sales were still strong with a 13% increase and Ford came in at 10%.

http://www.alipac.us/ftopict-229967.html

I believe Toyota had 0% in Dec and Jan. This monthit's only 0.9%.

Feb Auto Sales Up 27%; GM Sales Surge 46%, Toyota Sales Soar 42%‎
March 2, 2011

http://www.123jump.com/market-analysis/ ... -42/43148/