At least some of the problem is the artificially high sales last year, which is making this year's sales look a lot lower than they should. |
Consumers are going to increasingly weigh the importance of fuel efficiency. But if they need, in their minds, an SUV, they are going to find a way to stay in that vehicle. They'll still look for big engines, towing capacity, cargo space. |
Dwindling 2005 inventory levels and rising gas prices have caused a significant drop in full-size SUV and pickup sales. |
GM's market share ... should also show some improvement by month end, but it is unclear whether new models and aggressive pricing will be enough to pull their market share up to last year's average. |
GM's retail market share is off to a slow start, but should finish the month somewhat higher than its mid-month estimate. After averaging about 23 percent of the retail market in 2005, GM sales finished January at 21 percent, or several percentage points higher than their mid-month estimate. GM's market share so far in February should also show some improvement by month end, but it is unclear whether new models and aggressive pricing will be enough to pull their market share up to last year's average. |
I don't foresee pricing power [for the automakers] to be returning any time soon. For every plant the Big Three can close, the Japanese or Europeans seem to want to open another one here. |
I think incentives have been a concern for some time now as they impact margins. With GM pushing hard on incentives to boost their volume, it's pulling everyone kicking and screaming into the game whether they like it or not. |
I think the incentives are going to continue to be necessary. If you don't play the incentive game, you'll lose market share. At least in the first half of the year, even in the best case scenario you're just coming out of the recession, you'll need the support of incentives to maintain sales. |
I wouldn't yet rule out the chance we could be as good as last year. It depends on how things turn around now that the uncertainties of the war have played out and how aggressive the automakers continue to be through rest of the year. |
If we get a big kick start to the quarter with a strong April, that could offset us being a bit weaker than we expected to be in the first quarter. |
March, in my view, will be interesting. It'll be the first real test of the new chairman. |
Simply put, if the '03 had high incentives earlier this year before the clearance started, then the '04 are likely to have it sooner rather than later. The automakers want to give the '04 a trial period to see how they move without incentives. But they won't wait long, maybe only a month. |
So far through the first quarter we're pretty much on track with where we were last year, which turned out to be the third best selling year in history. However, it's still difficult to know if the big incentives that were implemented last year and pushed some monthly sales to near record levels will return and have a significant impact on the remainder of the year. |
The current incentive levels are not quite as high as they were at the end of last year. In the sense they have been higher, they probably could go up going forward. The price pressure are obviously going to remain very intense. But that said, they're not going to rise dramatically. They're already very good. |
The general consensus (on 2004 sales) is 17 million. If manufacturers come on strong with incentives, it'll easily be 17 million. If they pull back -- and there's been a lot of discussion of them pulling back -- it could be 16.5. |