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GM's Aztek Sales Jump As Buyers Trade Looks For Price
Dow Jones International News Service via Dow Jones
August 5, 2002
By Sharon Silke Carty
DETROIT (Dow Jones)--Nicer reviews have called it boxy, blunt or an "ugly duckling." Not-so-nice critics have gone so far to liken it to the Hunchback of Notre Dame.
But call it a hot seller?
The Pontiac Aztek, the oft-maligned sports utility vehicle launched by General Motors Corp. just two years ago, had its best-selling month in July, reaching 4,229 vehicles sold. That's up 141% from a year ago.
Auto dealers, analysts and critics can't agree on why sales were up so much. All point to steep incentives running throughout the month that rewarded buyers with either $3,000 cash back or 0% financing. But they note that the Aztek already had a $2,500 rebate in place before GM's SummerDrive incentive program began.
Jim Bobowicz, general manager at a Pontiac dealership in East Brunswick, N.J., said GM's incentive program and marketing drive helped bring customers who may not have been looking for an Aztek into the showroom.
"When people come in, they may not be coming in for an Aztek," he said. "They look at an Aztek and say, wow, this is several thousand dollars less for a lot
of car."
Lowering the price to purchase the car has certainly helped sales, said Jim Hall, an analyst with AutoPacific, a marketing and product consulting firm in Southfield, Mich. Hall was quoted in a May 2001 article in an Australian newspaper predicting sales wouldn't pick up for the vehicle until $2,500 was cut off its price.
"The Aztek is one of those vehicles that, when it's incentivized, it gives you a highly impressive car for the price," he said in an interview with Dow Jones Newswires Friday. "The problem is, you sear your retinas when you walk in the driveway to get into it."
Actually, once the company took off the Aztek's controversial gray side cladding and increased the size of the car's tires, Hall said it became a much better-looking vehicle. He said he no long considers it "the most hideous thing on the highway."
July's sales jump hasn't entirely convinced GM that consumers have finally come around to the Aztek. Paul Ballew, executive director for market and industry analysis, said the company is still evaluating how many vehicles it will produce in 2003, and whether it will extend 0% financing and incentives on the auto.
But the increase in sales "raises our comfort level heading into '03," Ballew said. "But it really doesn't alter our plans that much."
Ballew said the Aztek has had a "respectable year," noting that the car showed sales strength throughout the year that was "beyond our expectations." Still, he noted, it is a relatively low-volume vehicle.
Sales of the Aztek are down 0.6% for the calendar year, while companywide sales are up 1.7% year to date. Aztek sales were up only one other month since January, in April, when total GM sales were up 13%.
David Healy, an analyst with Burnham Securities, attributed the entire sales jump to incentives.
"I don't think it's a turn of heart on the public's part," he said. "I can't think of any other explanation as to why the monthly Aztek sales would have doubled last month. My guess is that the effectiveness of the incentives will wear off, and August's sales will be off of July's."
Dow Jones International News Service via Dow Jones
August 5, 2002
By Sharon Silke Carty
DETROIT (Dow Jones)--Nicer reviews have called it boxy, blunt or an "ugly duckling." Not-so-nice critics have gone so far to liken it to the Hunchback of Notre Dame.
But call it a hot seller?
The Pontiac Aztek, the oft-maligned sports utility vehicle launched by General Motors Corp. just two years ago, had its best-selling month in July, reaching 4,229 vehicles sold. That's up 141% from a year ago.
Auto dealers, analysts and critics can't agree on why sales were up so much. All point to steep incentives running throughout the month that rewarded buyers with either $3,000 cash back or 0% financing. But they note that the Aztek already had a $2,500 rebate in place before GM's SummerDrive incentive program began.
Jim Bobowicz, general manager at a Pontiac dealership in East Brunswick, N.J., said GM's incentive program and marketing drive helped bring customers who may not have been looking for an Aztek into the showroom.
"When people come in, they may not be coming in for an Aztek," he said. "They look at an Aztek and say, wow, this is several thousand dollars less for a lot
of car."
Lowering the price to purchase the car has certainly helped sales, said Jim Hall, an analyst with AutoPacific, a marketing and product consulting firm in Southfield, Mich. Hall was quoted in a May 2001 article in an Australian newspaper predicting sales wouldn't pick up for the vehicle until $2,500 was cut off its price.
"The Aztek is one of those vehicles that, when it's incentivized, it gives you a highly impressive car for the price," he said in an interview with Dow Jones Newswires Friday. "The problem is, you sear your retinas when you walk in the driveway to get into it."
Actually, once the company took off the Aztek's controversial gray side cladding and increased the size of the car's tires, Hall said it became a much better-looking vehicle. He said he no long considers it "the most hideous thing on the highway."
July's sales jump hasn't entirely convinced GM that consumers have finally come around to the Aztek. Paul Ballew, executive director for market and industry analysis, said the company is still evaluating how many vehicles it will produce in 2003, and whether it will extend 0% financing and incentives on the auto.
But the increase in sales "raises our comfort level heading into '03," Ballew said. "But it really doesn't alter our plans that much."
Ballew said the Aztek has had a "respectable year," noting that the car showed sales strength throughout the year that was "beyond our expectations." Still, he noted, it is a relatively low-volume vehicle.
Sales of the Aztek are down 0.6% for the calendar year, while companywide sales are up 1.7% year to date. Aztek sales were up only one other month since January, in April, when total GM sales were up 13%.
David Healy, an analyst with Burnham Securities, attributed the entire sales jump to incentives.
"I don't think it's a turn of heart on the public's part," he said. "I can't think of any other explanation as to why the monthly Aztek sales would have doubled last month. My guess is that the effectiveness of the incentives will wear off, and August's sales will be off of July's."