Last month, General Motors was giving away Dell computers to Saturn buyers, in addition to the usual offer of zero-percent financing and big rebates that were heaviest on remaining 2003 models.
Great Rebates from Cingular.
But car and truck sales in North America continued to produce only slight, albeit improving, returns for G.M. The company has been losing market share in the United States despite heavy spending on rebates as high as $5,000 and offers of no-interest financing for many of its vehicles.
So far, consumers have performed admirably, drawing on mortgage refinancing, tax rebates and heavy borrowing at low interest rates to pay their bills.
We assume that the move in supplier relationships from the rebate-heavy historic approach to a greater front-margin focus implies a near-term sacrifice in upfront payments, which should be compensated by gradual improvements on invoice terms.
The Beijing government is increasing consumption with rebates, subsidies and heavy bank lending.
Can the electric car survive only with heavy government subsidies and big consumer rebates?
This is no rebate, big profit, stuff.
Unlike G.M., Ford actually reduced its rebates and other incentives in the first quarter, although its overall marketing costs inched up slightly because of heavy advertising for new models like the Ford Focus.
While some racetracks give promotional offers to loyal customers, heavy regulation from state to state prevents them from returning cash to bettors in amounts that match the rebate shops.
