GM’s US sales chief talks about impact of incentives on January sales increase

Article by Christian Andrei, on February 8, 2011

General Motors Co. posted a 22% increase in January sales, prompting questions on whether its sudden increase in incentive spending had something to do with the results. GM U.S. sales chief Don Johnson responded to this observation during a recent conference call with analysts and reporters. Edmunds.com said that GM's incentive spending in January increased by 29% from a year earlier, to $3,762 per vehicle.

In the statement, Jessica Caldwell, Edmunds director of industry analysis, said that this is the highest per-vehicle figure among the six largest automakers.

She said that the surge “raises some eyebrows.” She also noted that GM increased its incentives even if it is selling more redesigned and refreshed models compared to rivals. Johnson admitted that it had a “modest” increase in incentive spending in January, which he says is because the company wanted to “get a head start” with sales.

He also said that he was surprised by its rivals’ decision not to follow GM and instead, cut incentives. He said that dealers and others in the industry have been closely watching incentive spending because they are worried that carmakers will go back to the “push” strategy of pushing too many cars onto dealer lots and moving them through profit-eroding discounts. GM and other automakers have made promises not to make use of these strategies again. [via autonews - sub. required]

Topics: gm, sales, united states

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