US Carmakers Roll Out Big Discounts

03 June 2005

US carmakers, still languishing in the doldrums, plan to ramp up sales incentives while cutting production in the third quarter of 2005.

Ford Motor Company says it will make 19% fewer cars than in Q2, while General Motors will cut its output by 12%.

GM's and Ford's incentives are designed to clear inventory ahead of the 2006 model year. Under GM's 'discounts for everyone' program, June buyers of almost all GM 2005 models will receive employee-level discounts.

Says Brent Dewar, GM North America's vp of marketing and advertising: "We want to bring the focus back to what drives our business: great cars and trucks. This program gives everybody a chance to drive the vehicles we drive and pay the price we pay."

GM's car sales fell 1.6% in May, although the company's Cadillac brand enjoyed its best sales month in twelve years. Truck sales slid 7.8% for the month compared with May 2004. GM's sales are now down 5.2% for the year.

At Ford, new vehicle demand fell for the twelfth straight month. Sales slipped nearly 3% in May, and Ford's total sales are down 4% for the first five months of 2005.

Data sourced from Financial Times Online; additional content by WARC staff