NYT/AP: Auto Sales Jump Dramatically in July (discounts)

[DeepModem Mom]

Auto Sales Jump Dramatically in July
By THE ASSOCIATED PRESS
Published: August 2, 2005


DETROIT (AP) -- The Big Three U.S. automakers are extending programs that let customers buy vehicles at employee prices after sales for the entire industry leaped to near record levels in July, but analysts warned Tuesday automakers could see some payback this fall.

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group saw their combined results climb 26.5 percent in July. Car sales rose modestly, up 4.2 percent, but truck demand shot up 36.7 percent.

The bevy of deals also helped foreign automakers attract customers. Toyota Motor Corp., Nissan Motor Co. and Hyundai Motor Co. all said July was their best-ever U.S. sales month, even though they didn't offer similar discounts. BMW and Mercedes-Benz, two of the major European players, set sales records in July as well, as did South Korea's Kia Motors Corp....

***

CSM Worldwide, an automotive forecasting company, estimated the Big Three discounts pulled ahead sales of 200,000 vehicles that would have happened later in the year. The firm predicted sales will slow down significantly this fall.

Joseph Barker, CSM's manager of North American sales analysis, said the deals were good because they cleared out 2005 inventory, but they could damage the brands' reputation in the long run by lowering resale values and establishing the Big Three as discount brands....


http://www.nytimes.com/aponline/business/AP-Auto-Sales.html

[napi21]

1. Any report pther than this would have been a complete disaster!

They were damn near giving the cars away! If noone woul have bought that inventory at that point, those companies would have been DONE!

NOW, what you need to watch is their quarterly earnings!

[Massacure]

2. With all those discounts though their earnings will be low.

[tanyev]

3. Yep. Remember all the 0% interest deals after 9/11?

The recent financial woes were blamed on the cost of health insurance and pensions for their employees; nobody even mentioned all the loss of earnings from the zero interest loans.

[kysrsoze]

4. Maybe they should build cars people actually want to buy at full price

We rented a car last week. We were supposed to get an Altima, but they were all out and we were stuck with a Ford Taurus. My girlfriend said to me, "Are we really going to drive this for 5 days?" It was just plain awful in every respect, so we turned around and paid extra to rent a Pathfinder.

I can't think of any "American" car I would even think of buying - just not worth it when it comes to terrible performance, bad styling and rotten resale value. These discounts will only make that worse. I suppose if I couldn't afford a car any other way...

[Voltaire99]

5. Didn't sway us!

We test drove a few. God, how underwhelming.

Then we sold our SUV and bought a delightful old Volvo. Great rebuilt engine, terrific classic body, better mileage.

And no payments. :-)

After our last experience, we just don't feel like buying a new car again. Not from Detroit; not from Japan. There's the dissatisfaction of owning banal expensive plastic, as well as the irrationality of being in debt in the shaky American economy over something that's losing its value by leaps and bounds. Er, no thanks.