The incentive ‘Push’ continues


GM announced the start of the next domestic automaker incentive battle with its “Red Tag” sale on Monday. Granted, domestic continue to lose market share and their mass market, high capital investment, volume based business model is being attacked at a rate faster than they are able to correct their mostly unappealing products and waste in their plants. Short term survival is certainly important and propping up business with incentives to move their volume based business is likely necessary – but where is the end?

This statement is from the Detroit News article linked above…it's a single phrase that just about sums up everything that continues to be wrong with domestics:

“I'm sure it will drive some sales,” said Keith Long, general manager of Tennyson Chevrolet in Livonia. “We've all got to pitch in and do our part to move out inventory.”

It will be interesting to see how Ford and DCX react…I wonder if it's time to take a stand? Sooner or later, survival will mean everyone pitching in to accelerate efforts to fix the business, rather than move inventory.

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Luke Van Dongen
Luke, an auto industry engineering veteran, blogged here from 2005 to 2006.


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