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Automakers: Cutting Production, But Not Prices

Monday, 28 Jan 2008 | 10:16 AM ET
AP

In asking you last week if now is a good time to buy a new car or truck, I was struck by how many people said, "Now, is not the time, but this spring it will be. That's when the auto companies roll out big discounts as sales slow down." Seems we've all become conditioned to expect spring sales.

Well, I hate to be the person to rain on your parade, but if you're expecting big discounts to pop up when the tulips bloom, you will be waiting..and waiting...and waiting. In fact, based on the people I've talked with at the auto companies, I doubt the deals this spring will be much better than what we're seeing right now.

Why?

Look at the latest projection from CSM marketing research in Detroit. It is forecasting GM will cut production 8.1 percent, Ford will build 16.3 percent fewer vehicles, and Chrysler will hit the brakes on the assembly line by 19.1 percent. In short, the big three are taking advantage of greater flexibility in their UAW contracts to idle assembly lines, pull down shifts, etc. so they don't cut into the profitability of their models.

That means, you can forget about major zero percent sales, or huge discounts. Sure, you may see a sweet targeted sale here or there to clear out a few slow moving previous year models. But that's it.

So is now a good time to buy? Like I said on Friday, If you can get the deal you want on the car you want, with the features your want, then yes, there may not be a better deal coming down the line.

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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