“shot of nitrous”

November 22, 2007

Its no secret that manufacturers use a variety of “levers” from – subsidized interest rates – adjusting residuals on leases – cash back – option packages – to name a few, its a game of what numbers they want to achieve, and how how imaginative they want to get.
If some models slowed down one month, manufacturers will give them a “shot of nitrous” the following month. If the budgets are low for the month, or the quarter they will wait one out and step up it the following month.

In the case of this discussion the folks at GM were either totally asleep at the wheel, the sales dropped in the US and Canada, or there are other factors/agendas that come into consideration.

Toyota Tundra does not sell well enough, or the wrong models are in inventory…Toyota will exercise the “cash back Lever” or the “subsidized finance rate lever” or the “lets adjust the residual lever” to arrive at a price point. Did the market really buy more pick ups, did GM and Ford pickups suddenly become POS, or did one manufacturer get aggressive to “steal” pick up business?

Chrysler for a multitude of reasons needs to “move a lot of iron” since careers are at stake, and the agenda might very well be, lets move all the iron we can to successfully close this deal, and try to save our careers. Last month didn’t Chrysler buy RDR’s(Retail Delivery Reports) by letting dealer get some sort of internal credit by keeping a vehicle on the road for 1 or 2 days.

If GM has dramatically curbed its fleet sales, who is picking up on the fleet business?

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