Can a drawn-out incentive campaign keep the domestics ahead of the imports?
Automotive News, for one, seems to think it would only serve to delay the inevitable. Detroit is on a trajectory to fall below 50 percent in market share in the
very near future, maybe even this month. It seems obvious that offering rebates and other incentives is merely a band-aid for the underlying issue.
As of the first half of 2007, GM, Ford and the Chrysler Group were down to just 50.2 percent of the new-vehicle market. That's a record low. A year ago that number was 56.0 percent. So given the fact that their share is plummeting, does it make sense to throw money at the problem and try to hold onto something they will surely lose eventually?
Actually, they may need the incentives just to stay competitive. Toyota, Honda and Nissan have really been aggressive in using incentives to grab customers this year. The Japanese now account for 37.5 percent of the market, up 5 percent from last year. Sure it comes with some psychological baggage, but losing market share isn't everything. It's a largely meaningless number and profits mean more in the end. Not that the domestics are any better in that arena, but dwelling on market share is a bit misleading.
[Source: Automotive News - sub. req.]
