GM's promotions boost sales in Sept.

A clearance sale helped lead to a successful month.
KNIGHT RIDDER NEWSPAPERS
DETROIT -- September was a banner month nationwide for selling new cars and trucks -- thanks to promotions and a clearance sale finale on 2004 models initiated by General Motors Corp.
Sales at GM, propped up heavily by costly incentives, surged a surprising 24.9 percent.
Industrywide sales were up 10.2 percent in September compared with last year, with 1.4 million new cars, minivans, SUVs and pickup trucks sold.
GM, the world's largest automaker, closed the month by offering consumers no-interest loans for 72 months on its older vehicles. It picked up a strong 3.8 percentage points of market share compared with September 2003, capturing 31.7 percent of industry sales.
"That's one heck of a month," said Jerry Seiner, a dealer in Salt Lake City, who is known as "The GM Guy." "That's a lot of cars. My compliments to GM, because it helped both of us have a great month."
Seiner said the clearance sale was a hit and led to his "best week in a long time."
Though impressive, though, that strong monthly performance only helped the Detroit-based automaker barely catch market share up to where it was last year. GM had 27.9 percent of the market for the first nine months of this year -- a tenth of a percentage point less than it had in 2003.
Exceeded expectations
Regardless, it was a big sales gain for the automaker after a disappointing August, which was dampened by hurricanes in Florida and spillover storms in other states.
Paul Ballew, GM's executive director of global market and industry analysis, said sales in the month "outperformed most people's expectations."
"It was strong from beginning to end," Ballew said, challenging reports in September that the month had started off slow. "We're pretty pleased with our September results."
The automaker refused to comment on concerns that its heavy discounting amounted to giving vehicles away to gain market share, saying it is in business to make money.
And during a conference call with journalists, Ballew brushed off questions about what GM's heavy incentives might be doing its profits.
Throughout the month, GM also was offering cash-back rebates and other financing deals on its 2004 and 2005 models.
For example, it offered $4,500 cash back on the 2004 Chevrolet Trailblazer SUV and a $1,000 rebate on the 2005 model, or consumers could choose a variety of financing options at reduced interest rates. The Trailblazer saw its sales jump 63.4 percent compared with September 2003.
"Our contribution margins are holding up fairly well; I would leave it at that," said Ballew, referring to sales minus variable costs like incentives. "We look at incentives as one part of pricing."
He noted that only about 20 percent of customers took GM up on the no-interest loan for 72 months and said the program did what it was supposed to do: Get customers shopping.
Ford, Chrysler
Ford Motor Co. matched GM's end-of-month sale offering on 2004 models but was one of seven automakers that posted declines in the month.
Ford's sales in September were off 4.2 percent compared to a year ago -- a performance that caused Ford's sales for the first nine months of the year to be down 4.7 percent compared with last year. Ford's market share through September declined to 19.7 percent from 20.9 percent.
GM's incentives in September may have helped spur vehicle shopping nationwide and boosted results for other automakers as consumers compared vehicles and deals.
For the month, sales were up 13.3 percent at DaimlerChrysler AG. At the Chrysler Group in Auburn Hills, Mich., a unit of DaimlerChrysler, Gary Dilts, senior vice president of sales, said the company took "a reasonably good share" of the cross-shoppers last month.
Despite its impressive performance, GM announced that it would trim production by another 10,000 units in the fourth quarter.