General Motors increased its August incentives in response to deals offered by its competitors after July sales came in “weaker than we would have wanted it to be”, vice chairman Bob Lutz has said.
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Lutz, speaking to Dow Jones on the sidelines of a Michigan conference, wasn’t specific about the incentive levels, but said he is “well pleased” so far with the sales numbers for August.
The news agency noted that GM registered year-on-year sales declines of about 20% in both June and July, raising concerns about the automaker’s ability to reduce fast-growing inventories, particularly of pickup trucks. With US consumer confidence hurting amid weakness in the housing market and high fuel prices, auto makers could have to boost incentives or cut production, moves that take a bite out of profitability, Dow Jones said.
Lutz said that, despite the lower sales in July, GM’s market share was at its second-highest level of the year because the overall market dropped as well but he told Dow Jones GM nonetheless decided to adjust its incentives in light of higher levels offered by some competitors.
“We’re going to be very responsible with what we do and get the right balance between selling at a profit versus really watching share decline,” he told the news agency.
However, Dow Jones said the latest JD Power & Associates forecast for August vehicle sales suggests the overall industry downturn continues as GM retail sales were off 14% year on year during the first week of August while Toyota and Ford were also down nearly as much.
