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Transportation equipment industry

Big Three Automakers Extend Employee-Price Discounts Amid Strong July Sales

Strategic Insights

— 2 min read

The Big Three U.S. automakers have extended their employee-price discount programs, citing strong sales numbers for July. General Motors, Ford, and Chrysler reported combined sales that rose 26.5% in July, despite modest car sales increases of 4.2%. Truck demand surged 36.7%, leading to record-breaking sales for some models. The employee-price discounts, which were initially set to expire Monday, have been extended until September 6 for GM and Ford, and indefinitely for Chrysler.

Key Takeaways:

  • Ford, the nation's No. 2 automaker, had the biggest month-over-month increase, with sales rising 35.5% over last July.
  • Sales of Ford, Lincoln, and Mercury trucks increased 38% in July, while car sales rose 26.7%.
  • The discount helped lift Ford's overall sales, which increased just 1.7% in the first seven months of the year.
  • Chrysler's sales were the highest monthly sales in its history, with business jumping 31% over last July, spurred by a 38.6% increase in truck sales.
  • GM's sales were up 19% over last July, with an 18% increase in truck sales.
  • Toyota's sales were up 12.2% in July, while Honda's sales rose 14.5%, boosted by a 30% increase in truck sales.
  • Nissan's 19% jump in business last month was led by a 24% increase in truck sales.
  • Hyundai reported a 14.9% increase in July, and the South Korean automaker's sales are up 10.9% for the year.
  • CSM Worldwide estimated the Big Three discounts hastened sales of 200,000 vehicles that would have happened later in the year.
  • Joseph Barker, CSM manager of North American sales analysis, predicted sales will slow significantly this fall, potentially damaging the brands' reputation.
  • Paul Ballew, GM executive director of global market and industry analysis, said GM anticipates some payback but believes the employee discounts will help transition buyers to its 2006 models.
  • John Rogin, a GM dealership owner, said he supported the decision to continue the employee discounts through Labor Day, citing a two-week supply of 2005 vehicles left after two months of employee discounts.

Statistics:

  • Combined Big Three sales in July rose 26.5%.
  • Truck demand surged 36.7% in July.
  • Ford's F-series trucks set a record for the highest monthly sales of any vehicle since the 1920s, with 126,905 units sold.
  • F-series truck sales were up 58% in July and 4% for the January-July period.
  • Chrysler's business jumped 31% over last July, with a 38.6% increase in truck sales.
  • GM's sales were up 19% over last July, with an 18% increase in truck sales.
  • Toyota's sales were up 12.2% in July.
  • Honda's sales rose 14.5% last month, boosted by a 30% increase in truck sales.
  • Nissan's 19% jump in business last month was led by a 24% increase in truck sales.
  • Hyundai reported a 14.9% increase in July, and the South Korean automaker's sales are up 10.9% for the year.
  • CSM Worldwide estimated the Big Three discounts hastened sales of 200,000 vehicles that would have happened later in the year.
  • GM anticipates some payback but believes the employee discounts will help transition buyers to its 2006 models.
  • GM has gained at least 100,000 customers who were new to its brands in the past two months.

Sources:

  • The Associated Press
  • General Motors Corp.
  • Ford Motor Co.
  • DaimlerChrysler AG's Chrysler Group
  • Toyota Motor Corp.
  • Nissan Motor Co.
  • Hyundai Motor Co.
  • CSM Worldwide
  • Paul Ballew, GM executive director of global market and industry analysis
  • John Rogin, a GM dealership owner

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