big 3 Auto Makers Average $4000 Incentive Per July Car Sold

DETROIT, Aug 4, 2003; Justin Hyde writing for Reuters reported that rebates and loan deals from Detroit's Big Three automakers swelled to an average of $4,000 per vehicle in July but failed to halt a slide in U.S. market share at General Motors Corp, Ford Motor Co. and DaimlerChrysler AG's Chrysler arm.

GM once again led the way in incentives, raising its average offer to $4,253 per vehicle, an 8 percent increase from June and a 37 percent increase from July 2002, according to data released on Monday by industry research firm Autodata.

Chrysler's incentives averaged $3,846, a 3.8 percent increase from June, while Ford's incentives averaged $3,687, a 5.8 percent increase. Despite the better deals -- which can devour profits -- all three lost market share in July.

The Big Three's combined share of U.S. sales stood at just under 60 percent in July, down from 61.6 percent a year earlier. Each point of market share represents billions of dollars in revenue.

GM launched a $1,000 loyalty rebate for current GM owners in July, a move that Ford and Chrysler chose not to follow. Analysts said that deal was one reason Ford and Chrysler suffered steeper sales declines than GM, whose results came in stronger than expected.

"We believe July's booming sales, and declining inventory, are further evidence that the Big Three (and their shareholders) will pay any price and bear any burden to maintain production in the face of rising supply from foreign-brand competitors," Goldman Sachs analyst Gary Lapidus said in a research note.

Foreign automakers also boosted their incentives but remained well off the pace set by the Big Three while continuing to increase their sales with new models.

Nissan Motor Co. Ltd.had the highest average deal among Japan's Big Three, with $1,492 per vehicle, a 6 percent increase from June. Toyota Motor Corp.'s average incentive grew 15 percent from June to $1,132, while Honda Motor Co. Ltd.'s deals averaged $805 per vehicle -- a 44 percent increase from June's $559 per-vehicle figure.

Snide's Remarks: Hey Detroit Guys - Maybe Its The Cars and Not The Cash?