Report Says New Incentive Programs from Domestic Automakers Have Nominal Impact on Retail Sales

WESTLAKE VILLAGE, Calif., Nov. 30, 2005 -- Despite new incentive programs from General Motors, Ford Motor Company and DaimlerChrysler, retail market share for the domestics has increased only marginally since the programs began, according to the Power Information Network (PIN), the industry's premier source for real-time automotive monthly retail sales data.

Retail sales and market share are an accurate reflection of consumer demand in the marketplace. The combined retail market share for the domestic automakers is 48.8 percent for the first 27 days of November -- a slight increase from their combined market share during the first 13 days of November (47.7%).

GM's "Red Tag Sale," which went into effect Nov. 13, has raised the company's retail share from 18.8 percent in the first half of the month to 19.9 percent through Nov. 27. In contrast, Ford Motor Company's retail share has declined from 15.3 percent to 15.1 percent, despite the introduction of their "Keep It Simple" incentive program, which was announced November 16. DaimlerChrysler, which launched its "Miles of Freedom Plan" on Nov. 21, saw an increase in retail share from 13.6 percent in the first half of the month to 13.8 percent through Nov. 27th.

At the industry level, retail sales from Nov. 1 through 27 have declined 15 percent when compared to the same time period a year ago -- which is consistent with the first 13 days of November. Retail sales for five of the six major automakers declined in November, while American Honda's sales remained flat. Ford, GM, DaimlerChrysler and Hyundai Corp. were down considerably, and Toyota Motor's retail sales declined by 3 percent.

"One reason for these declines is that automakers have cut back on the use of incentives, with interest rate subvention expenditures down 67 percent versus a year ago," said Tom Libby, senior director of industry analysis at PIN. "This November, the average interest rate on a loan for a new vehicle was 7.9 percent, which is up considerably from 6.4 percent during November 2004."

Retail market shares for the major Asian automakers have declined slightly during the Nov. 1 through 27 time period, although they remain high by historical standards. Toyota Motor's share for the time period is 17.4 percent, down from 17.9 percent through the first 13 days of the month. American Honda's share has slipped from 12.2 percent to 11.7 percent while Hyundai Motor's share has dropped from 4.4 percent to 4.3 percent. Nissan Motor's market share has remained flat through the month at 7.8 percent.

"The return of incentives is beginning to weigh in on the market as the month unfolds," said Bob Schnorbus, chief economist of global forecasting at J.D. Power and Associates. "However, their full impact may not be felt until December, promising to end the year on a bright note."

About Power Information Network (PIN)

PIN's automotive solutions are based on the collection and analysis of daily new- and used-vehicle retail transaction information from more than 10,000 automotive dealership franchises in North America. PIN's industry-leading automotive solutions incorporate consumer demand and sales information to improve business for automotive dealers, manufacturers, lenders, and other companies in the industry. Additional information is available at www.powerinfonet.com.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm's quality and satisfaction measurements are based on responses from millions of consumers annually. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, McGraw-Hill Education and BusinessWeek. The Corporation has more than 300 offices in 40 countries. Sales in 2004 were $5.3 billion. Additional information is available at http://www.mcgraw-hill.com/.