Will Ford and Chrysler Group Experience the Same Success as GM with Employee Pricing?

While GM, Ford and Chrysler Group might be gaining market share and delivering more cars, trucks and SUVs, profits are in jeopardy. (Photo: Trevor Hofmann, Canadian Auto Press)

What's the percentage split of sales among the Big 3? GM remains a strong number one with more than a third higher sales, at 30.3 percent, than its next closest competitor, Ford, which managed 19.6 percent of U.S. new vehicle sales. Chrysler Group increased its stake to 12.5 percent.

What might be more important to Detroit is that, according to Power, Tokyo has lost market share during this same period, showing that there may be some gain on the imports after all. But the domestics shouldn't get excited too quickly, as the report adds that sales for Toyota Motor Sales U.S.A. Inc., American Honda Motor Co. and Nissan North America are still increasing.

"The domestic programs are expanding the overall market," commented Tom Libby, Senior Director of Industry Analysis at Power Information Network. "But the Japanese are not selling any fewer vehicles than in the past; in fact, they are selling more vehicles than in both June and last July."

And the real burn of such employee pricing marketing efforts is, while GM, Ford and Chrysler Group might be gaining market share and delivering more cars, trucks and SUVs, profits are in jeopardy. Asian manufacturers,despite all the excitement at domestic dealerships, are still selling profit making products with fewer incentives, at an ever increasing

On a positive note, though, the employee discount programs are reducing inventories of 2005 model year vehicles. (Photo: Justin Couture, Canadian Auto Press)

rate. Profits mean more research and development into new technologies, more money for quality programs, plus more capital to pull from when designing future models.

Case in point, even after GM's stellar June sales it still posted a second-quarter loss of $1.19 billion USD in its North American automotive operations.

On a positive note, though, the employee discount programs are reducing inventories of 2005 model year vehicles at a critical time for the domestic automakers, prior to the majority of 2006 models becoming available.