Sure, it's only a summer blowout sale, and it may be short-lived, but the Big 3 are stealing market share in a monster sales month.
But it's not clear how long the party will last, because some GM dealers are running low on 2005 models.
In the first two weeks of July, General Motors, Ford Motor Co. and the Chrysler group grabbed a collective 62.4 percent of U.S. retail sales. That's up 6 percentage points from the same period a year earlier, according to the Power Information Network's sales data.
The data suggest that the GM Employee Discount for Everyone incentive and copycat programs at Chrysler and Ford have not lost steam. All three programs are scheduled to run through July.
The recent numbers are a sharp - though likely temporary - reversal of the Big 3's decades-long decline.
The Power Information Network gathers sales information from 6,200 dealerships. Those data suggest that July will be a strong month for the industry. Sales volumes for Toyota, Nissan and Honda are up, even though each lost market share.
Based on seasonally adjusted annual sales, J.D. Power estimates July's annualized results will top 19 million units. But J.D. Power has not raised its projection of 16.9 million units for the year.
General Motors confirmed projections of strong sales. The first 20 days of July's employee pricing program have been good, especially for trucks, says Paul Ballew, executive director of market and industry analysis.
While GM sales appear to be down somewhat from an extraordinarily strong June, sales are up sharply from the year-ago period. "We expect a strong industry and a duplication of June," Ballew says.
GM says dealers will have to make do with their current 2005-model inventories because the automaker is not taking any more orders.
By the end of June, GM had just a 48-day supply of cars and trucks, according to the Automotive News Data Center, down sharply from 73 days on June 1.
By contrast, Ford Motor had an 80-day supply on July 1, while the Chrysler group had a 75-day supply. Industrywide, a 60-day supply is considered healthy.
Some GM dealers say they will unload their 2005 inventory well before the summer blowout sale ends.
Otto Belovich, owner of Cherry Capital Cadillac-Subaru in Traverse City, Mich., normally considers it a good month when he sells seven or eight new Cadillacs. In June, he sold 12, and he expects to sell 15 in July.
Three weeks ago, Belovich ran out of 2005 CTS sedans. Now he's down to his last 2005 STS. He has turned to other dealers to help him.
Belovich recently had a customer who wanted a fully loaded 2005 black V-8 SRX. Belovich found the vehicle at a dealership in Detroit and made a deal to get it.
We're trading and buying a lot of inventory, he says. I have a good working relationship with other (nearby) dealers. They'll work with you if you've worked with them in the past. But if you haven't worked with them, you're not going to get what you want.
Tommy Brasher, a GM dealer in Texas, says he lost some July sales because his inventory of 2005 models is so low. It's hard to find what the consumer is looking for, says Brasher, owner of Brasher Motor Co. in Weimar, Texas. We expect sales to trail off in the next couple of weeks.
Ford dealers say July has been their busiest month so far this year.
I like the image and the message of joining Ford's family, says Duke Brubaker, general sales manager of Champion Ford-Lincoln-Mercury in Owensboro, Ky. I just wish Ford had come up with it first. We really should be leaders. Dealers are frustrated on that front.
Half of Brubaker's trade-ins are non-Ford products. In the first two weeks of July, he sold 40 Ford trucks, up sharply from 18 a year ago. But the dealership has not enjoyed a big increase in Lincoln sales.
Brubaker hopes Ford extends the Ford Family Plan through August.
The company would not indicate whether it will renew the incentive.
Ford Motor appears pleased with sales so far. Dealers have enjoyed a tremendous spike" in floor traffic, says company spokesman David Reuter.
Rising sales have helped Ford Motor to trim inventories of unsold 2005 models, says Ford CFO Don Leclair.
The Ford Family Plan is off to a very good start, he says. We expect to see our dealer inventory position for 2005 models improve, which should help our 2006 models get off to a very fast start.
Chrysler group spokeswoman Lori McTavish declined to estimate the automaker's July sales, although its incentive plan, Employee Pricing Plus, has gained consumers' attention.
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