GM Sees Good Things In January 2004

Thursday January 15, 12:38 pm ET By

DETROIT, Jan 15, 2004; Michael Ellis writing for Reuters reported that General Motors Corp. expects U.S. vehicle sales to strengthen industry-wide in January, with its own results helped by the giveaway of 1,000 cars and trucks over the next two months.

Gary Cowger, head of GM's North American automotive operations, said industry-wide sales will total a seasonally adjusted annual rate of between 16.6 million to 17.0 million in January, above a rate of 16.3 million in January last year.

Excluding medium- and heavy-duty trucks, Cowger's rate translates to overall sales of between 16.2 million to 16.6 million compared with 15.9 million last year.

"That's a wide range, but you just can't tell, because the last week defines the market," Cowger told reporters following a speech at a conference sponsored by the trade magazine Automotive News late Wednesday.

In a typical month, a large proportion of vehicle sales are finalized in the last week.

More than 42,000 people visited a GM dealership in the first two days last week of the automaker's "Hot Button" giveaway 1,000 cars and trucks through the end of February, Cowger said. The $50 million marketing program, which GM bills as the largest in automotive history, is aimed at helping GM boost GM's sales through one of the slowest periods and above last year's slow start to the year.

Ford Motor Co. boosted cash rebates to as much as $3,000 and cut interest rates on financing offers on some new car purchases on Wednesday, following a similar move by GM earlier this month to raise sales.

Cowger also said GM has offered Cadillac dealers some incentives on the new SRX sport utility vehicle, to smooth out inventories. Cowger said the bulk of SRXs that GM initially delivered to dealers were pricey, high-end models with V8 engines and many options included, such as DVD players and a sunroof. But consumers in many parts of the country want the SRX with the V6 engine, he said.

SRX prices start around $38,000, but a V8 model with many options can hit $60,000.

"I think that was really our problem for getting the wrong mix (of vehicles) out there," Cowger said. "They ended up being fairly pricey out there. Then when the V6 came in, you had quite a discrepancy (in prices), not just because of the powertrain, but because we loaded up those first ones."