New Car Sales Down, Are Incentives on the Rise?

The big three U.S. auto makers reported a decline in new car sales for the month of June. GM took the biggest hit with a 21.3 percent drop. Ford's U.S. sales plunged 8.1 percent and DaimlerChrysler faired the best with a decline of just 1.8 percent.

In contrast, Japanese manufacturers are posting big gains for the month. Toyota reports a gain of 10.2 percent while Nissan sales rose 22.7 percent and Honda Motor Co. states a rise of 11.5 percent.

GM blamed their drastic drop in new car sales on a few factors such as a planned reduction in fleet sales, a comparison to last year when they offered a big 72-hour sale, and Toyota's aggressive truck incentives. Paul Ballew, executive director of GM's global market and industry analysis, states, "If we have to make some changes in our incentive play, we will, because we are not going to cede ground in a category (trucks) that we feel we're best in class in." GM acknowledges that Toyota's 0% for 60 months incentive on the Tundra hurt GM truck sales and may be looking at bigger discounts for the Chevrolet Silverado and GMC Sierra for the rest of the summer sales season.