Thursday, Sept. 11, 2003 | 11:07 a.m.
Two years after the Sept. 11 terrorist attacks that shattered consumer confidence, the president of General Motors Corp. North American division said the year should end on an up note as dealer morale is high and the economy continues to show signs of recovery.
While there has been speculation that GM may not reach its goal of increasing United States market share in 2003, the company has made progress over the past four months and is ahead of its year-to-date goal, Gary Cowger, president of GM North America said Wednesday.
"It's going to be a race to the finish to see how well we do," he said. "I'm much more hopeful and optimistic now than I was at the end of the first quarter."
Cowger said the automaker's sales rates are up and that the economy as a whole has picked up as a result of lower taxes, leaving more money in people's paychecks.
"It's been a significant stimulus for people," he said. "I'm cautiously optimistic."
GM dealers sold 472,427 cars and trucks in August in the United States, slightly down (0.5 percent) from August 2002. GM's overall truck sales, 284,129, were up 5 percent over a year ago, but car sales were down 8 percent to 188,298 sales, the company reported.
Cowger was in Las Vegas this week for a conference of General Motors dealers and executive managers to kick off the 2004 sales year. About 7,000 people attended the conference.
Cowger said he looks for GM's momentum to continue to build when the company releases 16 new products for 2004. The automaker will continue to release more than a dozen new products each year for the next six years.
"It's a combination of getting great products, changing and getting newer products in your portfolio faster than your competition and then a general improvement of economic conditions in the United States," he said.
Incentives
Many of those products will not be offered with the incentives that consumers have become accustomed to since the Sept. 11 terrorist attacks.
GM launched a zero-percent financing strategy after 9-11 under its "Keep America Rolling" campaign. Ford Motor Co. and Chrysler Corp. quickly matched the deal and such extreme incentives have been a part of the auto-buying landscape ever since.
It is not only domestic automakers that are offering incentives. Incentives among Asian auto companies, such as Toyota, rose 33 percent in August from a year ago, the Associated Press reported.
Industry wide, the average manufacturer incentive per vehicle was $3,004 in August, down from $3,029 in July, but 52 percent higher than August 2002, according to Autodata Corp.
Jim Marsh, a long-time Las Vegas car dealer and owner of two auto lots including Jim Marsh Chrysler Jeep in northwest Las Vegas, said incentives are now a "way of life" for the auto industry.
"I'm sure the manufacturers would like to get away from it, but the first one that does away with it, the other has the advantage," Marsh said. "It's a game of who blinks first."
John Saksa, general manager of Findlay Cadillac and Saab, 315 Auto Mall Dr., said incentives aren't what they were just after the Sept. 11 terrorist attacks.
"It's starting to pull back a little," he said. "We are starting to see good profits again, so we are starting to tighten the belt on incentives."
Cowger said while incentives may not be as large by the end of this year, they will still be around, and can be adjusted on a regional level to focus on a certain market.
"I think right now, given the amount of product that is out on the marketplace and given the competition, incentives are going to be around for awhile," he said. "If the economy picks up and natural demand goes up, that will have a mitigating effect."
Competition
And nowhere in the world does competition remain more intense for consumer car dollars than in the United States.
Asian brands saw sales rise 8 percent in August, while General Motors Corp., Ford Motor Co. and Chrysler had an overall drop of 6 percent, the Associated Press reported.
The news service agency reported that U.S. market share for GM, Ford and Chrysler fell to an all-time monthly low of 57.9 percent in August. In the first eight months of the year, the three company's total U.S. market share was 60.1 percent, down from nearly 62 percent a year ago.
At the same time, Asian brands increased their U.S. share from 31.3 percent to almost 33 percent, the Associated Press reported.
Cowger said automakers should not be pitted against each other in domestic versus foreign categories, but that each company should be evaluated on its own merits within the industry.
"There are some domestic motors that are doing well and there are some foreign motors that are not doing well," he said. "General motors has done very well on (market) share in July and August. You just can't lump all the foreign manufactures in one bucket. It's unfair to them by company and it's unfair to the domestics by company."
Cowger said the market will eventually sort itself out.
"Because of the competition, there is some overcapacity," Cowger said. "I think that the competition will remain intense, as you have more manufacturers, more models, more customer choice, and no where is that more true than in the United States right now."
On a local level, some new car dealers say the market still has room for competition.
There are 61 new car dealerships in Southern Nevada, three more than last year, according to the Southern Nevada Car and Truck Dealers Association Inc. Of those, 19 are GM dealerships.
"It's a very good car market, it compares to Phoenix," Jim Saksa, general manager of the Findlay Cadillac and Saab. "Granted, the cities aren't the same size, but we have room for a few more (dealerships). People like an option, and like to be able to go somewhere else."
Saksa said today's car buyer has higher than ever expectations with car dealerships, as car prices increase and as more expensive cars are sold.
"In the Cadillac market, the average price is now about $50,000, that's in the BMW, Mercedes area and customer expectations go along with that," he said.
Saksa said the increase in the number of dealerships is keeping up with the population growth.
But Jim Marsh, owner of Jim Marsh Chrysler Jeep, thinks the Las Vegas market is oversaturated.
"There's too many dealerships going up," he said. "It could be unhealthy down the road," he said. "They read the great growth of Las Vegas, which is true, but they're too ahead of the curve of where the market is growing to support that many (dealerships)."
The Associated Press contributed to this report.
archive
