“The pressure to keep incentives high and move them higher will be pretty intense given amount of inventory and the relatively sluggishness we're seeing in sales. It's hard to imagine them going higher, but GM did throw another $1,000 [per vehicle] on its incentive programs the last week.”
“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.”
“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.”
“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.”
“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.”
“They might want to (pay more) in the short term to avoid a strike. But if they're spending money now to gloss over the hard decisions that Delphi needs to make, they're only going to compound their problems when their turn comes up.”
“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.”
