Edmunds writes that GM’s (GM) North American market share in the most recent month dropped to 22.1%. In 2002, during the same month, the number was 30.2%. The latest number is a record low for the company.
Odd as it may seen, the cause of the market share drop may be that the company has lowered its incentives more quickly than the competition. The company’s June 07 incentive per vehicle was $2,830. A year ago, that figure was $3,135. Toyota (TM) and Honda (HMC) both raised incentives sharply.
The information highlights GM’s "damned if you do, damned if you don’t" dilemma. The company wants to wean itself from sales to car rental agencies and offering huge incentives directly to retail customers. Both actions keep sales high, but drive up the loss-per-vehicle that is crippling profits in North America.
On the other hand, GM’s 21% drop in June unit sales shows that moving away from incentives wreaks havoc with moving inventory.
The solution, of course, is to build cars and trucks that consumers will buy. That appears to have been lost somewhere among all of the headlines.
Douglas A. McIntyre can be reached at [email protected].
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