R.I.P. General Motors (1931-2006)

Maybe you should not cross post to a GM group if you don't want to read
about GM's.

 

It would help to not include the crosspost to the GM Group....no brainer!

 

LOL I second that motion!

 

Actually, GM & Ford overseas operations are quite profitable. It's the
domestic scene where they suck...

JT

(Who hates GM and doesn't have a lot of affection for Ford either...)

 

Re-red the reply dingbat. No disagreement that GM and Ford currently
outsell any import brand. But Ford and GM are not just losing share,
they are losing sales fast. And just to specifically highlight those
vehicle sales results:

May YTD
Ford 260,985 - 2% 1,199,566 - 3%
Toyota 235,708 + 17% 1,000,524 +9%

Ford still outsells Toyota, but not by much. If the current trend
were to hold for a couple years, Toyota would be outselling Ford.

 

I guess your figures are for US only

Toyota is number two in the world and closing in on GM fast

GM is decreasing world wide and question is what will make Toyota
number one faster Toyotas increasing production and sales or GMs losing
ground

Toyota will not increase faster than they can do the whole marketing
chain properly

Toyota is not only about producing more and then try to sell

That is a major component in their strategy and is what makes them
number one soon

 

That is correct. Thanks for clarifying.

 

Has the situation improved or got worse in one year?

http://www.businessweek.com/magazine/content/05_19/b3932001_mz001.htm

 

Just wait until the Chinese makers swarm in and start taking share from
the rental fleet sales .

John

 

That is going to piss of Honda and Toyota, who are trying hard to break into
the corporate fleet and the rental fleet markets. Honda and Toyota have had
near zero penetration with the corporate fleets, but some success in with
the rental fleets. Honda and Toyota can not beat the Korean cars
penetration of the corporate fleet and rental fleet markets now. One can
only wonder what will happen when the Chinese become their competitor.

 

Even without the Chinese, the Wall Street Journal reported that SUVs
are renting for less than cars because renters don't want to pay for
the gas. That means that the rental companies will be buying fewer
and smaller SUVs and more fuel efficient cars. With GM and Ford
vowing to reduce fleet sales (really discounts on fleet sales), look
for other manufacturers to jump in. Mitsubishi and Nissan might be
well positioned for this.

 

Honda and Toyota are capacity constrained. That is why Honda just
announced that they are building another US factory. Since they can't
keep up with the highly profitable retail demand, why would they want
to underbid GM, Ford and the Koreans for the bottom feeding fleet
market?

GM and Ford need the fleet sales to keep their volumes up. Otherwise,
the fixed costs kill them. GM vows to limit their fleet sales this
year. Since their retail sales are in the toilet, they will either
have to relent or seriously reduce production. Maybe both.

 

The fleet discount averages around $600 among all manufactures, domestic and
foreign. Every manufacture tries to sell to government fleets, corporate
fleets and rental car companies. The difference is the domestic are more
successful at getting those sales than imports. The reason is simple, the
domestics are more cost effective in terms of the overall purchase,
insurance, maintenance, repair, down time and replacement costs. With
exception of rental vehicles, and short term leases, fleet vehicles are kept
in service for a long time


mike hunt

 

Ya right, that is why there account executives where always in our offices
trying to get some more of the fleet business.
Toyota and Honda and most every other manufacture sells to fleet if they
can

In the order banks the first vehicles scheduled for each build cycle on the
assembly line are dealers RETAIL orders than dealer stock orders, dealers
fleet orders are last. It is only when the assembly plant is in a position
to fill a very large order for a fleet that those orders are given
preference, and the reason is to build them all at the some time to move the
line faster. Where do you come up with your strange ideas?

mike

 

Gee, then why is GM trying *not* to make so many fleet sales?

http://www.detnews.com/apps/pbcs.dll/article?AID=/20060518/AUTO01/605180398/1148/BIZ

(GM sales and marketing chief, Mark) LaNeve said GM's fleet sales in
May will be down 20,000 units, "which will hurt our year-over-year
comparison." Overall, GM fleet sales will be down in 2006 "to a level
that makes sense."


http://www.freep.com/apps/pbcs.dll/article?AID=/20060602/BUSINESS01/606020428/1014

"GM, though, was able to continue lowering its fleet sales and
incentives substantially. The company reported that fleet sales,
typically less-profitable sales to the rental-car companies,
businesses and the government, were down 16%."

"GM's incentive spending kept plummeting, partially explaining the
falling sales. GM's incentive spending declined 30.6% in May compared
with a year ago, for an average of $2,781 per vehicle, said Autodata
Corp., a research firm in Woodcliff Lake, N.J. Automakers do not
publicly report how much they spend on incentives, which eat into
profits, so several firms estimate the spending."

And, in Canada:

http://www.cbc.ca/cp/business/060531/b053186.html

"Some analysts are predicting that General Motors Corp. will be hit
hardest because it is trying to wean itself off incentives and fleet
sales, "


So lets summarize. GM is spending $2,781 per vehicle in retail
incentives and fleet sales are less profitable than that. GM actually
wants to reduce the number of such sales which suggests that they
don't even cover their variable costs.

I have posted links to this information for you before. Quit trying
to make it sound like fleet sales are profit generators. Otherwise,
explain why GM is trying to reduce them. It's not like they are short
of cars to sell.

 

In other words, fleet sales are intended to dump excess capacity. GM
is pledging to reduce output rather than sell the excess to fleets.
That only makes sense if fleet sales are unprofitable. Of course, the
entire corporation is wildly unprofitable, so you know that fleet
sales must really be financially unattractive.

If Honda and Toyota are trying to make fleet sales, it must be at
prices which are profitable. No wonder they are losing out to GM and
Ford dumping cars below cost.

 

GM has $300.000.000.000 debt and growing

It will be interesting to see how far banks are willing to let the debt
grow

What is really the point of producing cars just to increase the debt?

GM is losing more than $1000 on each car they make

It will also be interesting to see who is going to lose most when GM
finally rolls over that is when the banks have the guts to stop lending
them money

There will be a lot of other bankruptcies to follow the big one

 

GM and Ford have produced way too many cars for years -- many more
than they can sell profitably. In order to sell these excess
vehicles, they offer incentives. Many times, selling the huge
supply overage requires huge incentives -- which of course reduces
(or in this case eliminates) profitability. They have done this way
too much and for way too long and they are drowning in the resulting
red ink. The obvious answer is to stop making too many cars, but
they're having difficulty doing this. Ford and GM are configured to
make lots and lots of cars and the fixed costs are killing them. If
they reduce the number of cars produced without changing the
underlying problems of being configured to make so many vehicles
(i.e., number and costs of employees and too many plants, etc, etc,
etc) it may not help at all and may actually make things worse. Of
course, they need to make some vehicles -- besides SUV's and pickups
-- that people want to buy too. Also, they need to solve the huge
union contract (salary and healthcare) issues. All in all, not a
very pretty picture.

 

Simple, GM has dramatically reduced the MSRP on all of their vehicles, there
is no need to offer an extra $600 discount to its dealers that sell to
fleets, particularly those dealers that sell primarily to fleets.

mike hunt

 

You live in a dream wold, no manufacture sells vehicles to their dealers
below cost and no dealer sell to a customer below cost. GM has had
operatinh lossed but they still make a profit on every vehcile they sell.
MSRP has nothing to do with market pricing and economies of scale determins
the build cost. You would be srprise if you knew what it actully cost to
build any vehicle and the small differace in the build price of a vehicle
with an MSRP of 25K and one with an MSRP of 45K.

mike hunt