Topic: Couldn't resist posting these numbers

[davidm]

From www.autoblog.com

"GM loses a lot of money on every vehicle sold
 
I guess it should come as no surprise that GM loses a lot of money on every car that leaves the showroom, considering that the company’s North American car operation is bleeding a few hundred million dollars every month. Harbour Consulting puts a number on this, and that number is $1,227 per car for the first half of this year. Ford loses only $139 per car; unfortunately, that still tends to add up when multiplied by 3 million or so vehicles per year. Chrysler manages to make $189/vehicle, while Nissan busts out a profit of nearly $1826 per vehicle, Toyota takes home $1488, and Honda nets $1203."

I don't know anything behind these numbers (regions, what's in vs what's out, etc.), but those are pretty nasty.  Business 101 says negative gross margin is a problem (but they'll make it up in volume ).

[si]

I think a major problem comming is: what happens when GM wants to (needs to) take off that GM employee pricing and sells the car for sticker price.  Consumers have grown to value the car for thousands less and won't want to pay more for the same car.  Bye bye sales.  It's like they just keep on digging.

[tenpenny]

And I think I read that Ford is launching the Fusion with incentives....crazy.  You need to build up demand before hand, then  you don't need to launch a car with incentives.  If you make people want your product, then you control the pricing.

The big 3 just can't seem to get out of this rut.  Because consumers DON'T VALUE THEIR PRODUCTS THAT HIGHLY.  If consumers did, then they wouldn't need more and more incentives to move product.

[tpl]

I think you are right RobA.
Maybe a way out is for GM to drop the  MSRP to something approaching the current level and then insist the dealers sell at MSRP or within 1% or so.   Legally they may have a problem doing this but maybe also it is time that they went to far fewer dealers and far less competition.  Any dealer who didnt go along might find that their supply of Corvettes and Cadillacs dropped to zsero.

probably wouldnt work 'cos there is still a problem to do with GM selling cars that people want to buy, lust after.... as distinct from have to buy, or, buying the local product even if it is not the best, or, buy because they have always bought GM

[davidm]

More from www.autoblog.com

"GM not so bullish on big SUVs
 
Citing high gas prices, image factors and an increasing number of alternatives, GM is scaling back its expectations for its new line up of large SUVs based on its GMT900 truck platform. These vehicles include the Cadillac Escalade, Chevy Suburban and GMC Yukon along with their variants. GM’s large SUVs hit their sales peaks in 2001 and 2002 when 505,000 units were sold, but sales have dipped to a projected 435,000 units for 2005. Despite the slow down for these esuvees, GM’s large pickup sales are expected to reach 1.1 million this year, which we assume is the combined figure for both Chevy and GMC models. That target is certainly attainable if the incentive gravy train doesn’t derail before Christmas."

Ok, let's take stock here.  The one thing they are good at selling - big trucks - are going to sell less.  The one thing they sell with semi-decent margins - big trucks - are going to sell less.  According to the autoblog folks, they think incentives have to carry through the fall - primo car selling season of new models - to hit these revised down numbers.  Sounds like a whole lot more pain in store for the general.

[inco]

The next few months will be interesting to track as consumers, who are now conditioned to expect an incentive or discount, are weaned off the programs. GM faces the stiffest challenge for sure.