Falling stock prices, a slowdown in the housing market and tighter credit could lead do a decline in auto sales, but there has yet to be a major impact.
In an interview yesterday, Bob Lutz, GM’s vice chairman and head of product development, said, “It is never good when the stock market goes down. It takes wealth out of the economy…people feel poorer and decide to defer major purchases.” But Lutz sees the downturn as only a “momentary correction” for the “prosperity due to sub-prime mortgages and a building boom that was unjustified.” GM felt the hit to the sub-prime mortgage market through GMAC, its former financial division. GM still owns 49% of GMAC.
But even with the market in a downturn, Lutz said GM sales over the last two weeks have outpaced expectations, thanks to an increase in incentives, according to Automotive News. GM’s U.S. sales were down 19% in July, which Lutz attributed to higher incentives offered by competitors, especially on the Toyota Tundra.
Chrysler’s CEO, Bob Nardelli, is calling for the Federal Reserve Bank to cut the prime interest rate to help the economy and the auto industry, reports Automotive News, and said that “sooner is better than later.”
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08/17, 8:23 AM
posted by:
Deanster
“It’s never good for the stock market to go down…” Thank MR. Obvious, any other xxxxing nuggets to tell us?
Here’s one: YOUR COMPANY WILL BE IN SOME SERIOUS TROUBLE IF YOU DON’T REVAMP YOUR LINEUP.
08/17, 8:33 AM
posted by:
jJayC08
Deanster… grow up. I wouldn’t doubt it when I’m done writing this comment, yours is wiped off the page.
And GM’s created some excellent products, Deanster. Aside from some of their smaller, unlooked divisions, GM’s back on track with some really good cars, that I’ve sat in and will personally say are great quality, and nice inside and out. Chrysler though I can’t say the same for. The only thing I’d even consider from Chrysler is their minivans and Dodge pickups (which I’d rather buy Ford at that, but I love the looks of Dodge).
As long as the economy has a soft landing, people will continue buying cars. Right now it doesn’t look extreme, but what’s lingering in my head are those gas prices. I can’t believe that they went down 3 cents in my town last week!!! *laughs*
08/17, 8:53 AM
posted by:
damienPOWER
Chrysler
08/17, 9:17 AM
posted by:
A4
ford sucks yay edge not
08/17, 9:36 AM
posted by:
maximus
GM isn’t that bad for their lineup. The market slowdown will hit them when it gets harder for people to get financing. If the fed cuts rates to 3% or lower, you will see the economy pick up, but inflation might spiral out of control. It’s a tricky game, you see.
08/17, 9:53 AM
posted by:
CarLord
Tricky is rite, its a fine balancing act.
08/17, 10:17 AM
posted by:
CTS DRIVER
well if people feel less wealthy the go for a bargain, if the domestics can offer a lower price (cant complain about reliability anymore)then this can actually be good for them as their products are very competitive rite now.
08/17, 10:34 AM
posted by:
Elvio
Why couldn’t they admit that they don’t have good products for the market???
08/17, 11:21 AM
posted by:
TomF
They have a lot of good products for the market and more in the pipeline. There is still too much product overlap and pointless nameplate extensions, and I don’t for the life of me understand why there is a Chevy Equinox and a Saturn Vue and a Pontiac Vibe too, but that doesn’t mean the Vue, at least, isn’t a good product.
If the credit squeeze continues in the market, GMAC can still run any financing deal it wants to spur sales.
08/17, 12:44 PM
posted by:
Driven
I’m floored by these statements where GM blames everyone but themselves for their past, current and future problems. Toyota & others caused a 19% GM downturn last month. Stock price falls will cause future problems for GM. GMAC sub prime lending will cause future headaches for GM as will rising interests rates – even though these problems hit the competitors just the same. Take responsibility for GMAC being heavily involved in sub prime. Take responsibility for your competitors cutting into your sales. Stop complaining Lutz and take action! I want to see GM succeed but the outlook looks grim every time Lutz opens his mouth.
This isn’t how you spur confidence in your stock or new sales.
Bob Lutz named the Tundra specifically as a reason GM has seen a 19% decrease in sales in July. Why does he openly give credit to a competitor in a time when he wants to increase sales? Management at the Big3 never fails to surprise me with the bad decisions and crap that comes out of their mouths.
GM_sales, this is where someone can turn one of your frequently used phrases back on you: Looks like Toyota is taking business away from GM. The difference is this statement is true and verified by the CEO of GM, Bob Putz, er Lutz.
08/17, 1:02 PM
posted by:
jackjimturkey
Those Tundra’s are only selling because the Toyota Dealers are telling their customeres toyota is owned by GM.
The new Aveo SS will mop the floor with any toyoto or lamborghini!
08/17, 2:15 PM
posted by:
nitinsharma1000
wow you sound like GM_Sales jackjimturkey
08/17, 4:27 PM
posted by:
Commodore
jackhimturkey (the real one). I think GM SALES has hacked your account. Although I hate the Tundra which really is not as good as the SILVERADO and F150, it isn’t selling because dealers are telling them that Toy is owned by GM. We’ve been over this, the Tundra has ridiculous incentives as Lutz mentioned. I would like to hope that Americans aren’t stupid enough to believe Toy is owned by GM
08/17, 4:43 PM
posted by:
jackjimturkey
Commodore: I was just playing GM sales for a minute.
Got that idea, i think from piablo.
No, it was RicardoHead
08/17, 5:17 PM
posted by:
Commodore
GM SALES, although he doesn’t make any sense most of the time, is actually pretty notorious around here. People actually read his xxxx (usually for a life, or just curious) but hey, it works. I mean how many people on this board know who “GM SALES” is compared with home many people know who “Commodore” and “jackjimturkey” are.
08/17, 7:20 PM
posted by:
jackjimturkey
I have an oldsmobile, and if I’m going to drive an ordinary person’s car, i’ll feel a lot more comfortable in one built by GM than one built by someone else. That’s been my experience.
I think they have some great products now, and people are falsely associating the present with the 70s and 80s.
But I do admit that they made some horrid cars, and even some decent ones that didn’t work because their styling/interiors weren’t well-done.
And i can even admit that there are other companies that make good vehicles.
08/17, 8:36 PM
posted by:
Commodore
jackjim you nailed it – The false association is the root of the perception problem GM currently has. I wish more people on this site could be more objective (admitting that the competition is also good)
08/17, 11:33 PM
posted by:
Stridder44
Maybe if everything that came out of GM didn’t look like the xxxx that comes out of my dogs ass, their cars might be a little more appealing.
08/18, 1:38 AM
posted by:
Commodore
Elaborate on that Stridder – gives us some examples of GM cars so we can picture what your dog’s xxxx looks like. I really want to know.
08/19, 4:24 PM
posted by:
BLISS
JUST WORK ON YOUR PRODUCT LINE AND THINGS WILL BE MUCH BETTER……REACH FOR IT.
08/19, 5:08 PM
posted by:
jJayC08
Yes Stridder, tell me what automobiles GM has that hasn’t been updated in the past 10 years that looks like “****”.
People complain alot about body panels not fitting well on American automobiles. I notice that they just don’t know how to hide them very well- such as door sills.
GM has made some horrible cars, you gotta admit there weren’t too many great offerings by auto manufacturers around then, including Honda and Toyota. I suppose they never felt it as hard though, since they stuck to smaller cars- which left the market totally open in the 80’s for the Japanese. See where I’m getting at?
But now, GM and Ford are making some really nice, great cars. Personally, I think Chrysler isn’t- nothing they make, aside from the Jeep Wrangler, Cherokee and Liberty, Dodge (mostly for their styling), and Chrysler minivans are really worth buying to me.
Toyota and Honda are slightly ahead of the Big Three right now, but the margin isn’t much- I would gladly take many of the Big Three’s products over Japanese, and the other way around.
08/19, 11:50 PM
posted by:
AMGoff
Personally I don’t give a flying **** with regard to what these guys have to say about the economy. Their job is to build great cars not to play Alan Greenspan for a day.
Regardless of this smack I’m in a fairly good mood… why? I finally bought myself a Cadillac. My mother was in a car accident the other week and while she came out of it okay, her Sebring did not. After a bit of contemplation we decided to give her the wife’s 300M to save her from a car payment. Along with this shuffle the wife took my Regal GS which meant I was without a car. I had no idea what I wanted so just took a ride out to the dealer my family has dealt with for years and that we bought the Buick from… and there she was – a Thunder Gray 2004 Cadillac Seville SLS with only 29,000 miles. We took the car overnight to check everything out thoroughly and the only problem I found was that it was not in my driveway! Absolutely beautiful car, dream to drive, fast as hell, and fully optioned with everything minus the sunroof. We signed the papers the next day.
Even though this is the first time ever we don’t have atleast one Chrysler as a daily driver I think I may have found my dream car! At least we still have the Wagoneer and the Sebring,,,
08/20, 11:30 AM
posted by:
jackjimturkey
AMGoff: Congrats, enjoy her
08/20, 4:46 PM
posted by:
LamborghiniZ
Sebring? 300M? Regal? Seville? Wagoneer? AMGoff, you should know better.
08/20, 7:06 PM
posted by:
AMGoff
Know better about what?
The Grand Wagoneer is damn near 20 years old I am the second owner of 13 of those years, everything is original except the paint. 120,000 miles on the 360 and the old gal barely feels broken in. There is nothing on that thing that I can’t work on myself. By far the most rugged, dependable SUV ever created and the styling is classic.
Bought the Sebring new ten years ago, never had a single problem with her except for a tie-rod end. 85,000 miles later and she’s still a great looking convertible and still sees weekend duty during the summertime.
Bought the 300M new in 2000, was my daily driver until 2004 when we got the Buick and has since been my wife’s daily driver. She’s an athletic trainer and loved having all that space for her equipment. 79,000 miles and was never in the shop once. Now that mom has it we’re happy it’s still in the family.
Regal GS – not a single problem in three years of ownership. Comfortable and fast, it’s now the wife’s daily driver.
I’ve got five reasons to never, ever buy an import.