Steady hands are needed today

Make no mistake, the transportation business is having a tougher time than just about any other industry.

You might argue that the airlines are having the toughest time right now, but they seem to have been able to get some relief from the government. The automobile industry won’t get any help.

The 0 percent financing promotions that the Big 3 launched right after Sept. 11 have had a big impact on maintaining sales volume in the United States. Even in a tough time, Americans can’t resist a sale.

The real challenge for the Big 3 and the rest of the U.S. industry is to come up with additional promotions that can begin after 0 percent financing ends. Otherwise, there will be some drastic sales declines in the coming months.

There are those who warn against the continued use of rebates and incentives to keep car and truck sales going. But American consumers have been used to such incentives since the 1973 oil embargo. In those days, Chrysler invented the rebate, Joe Garagiola was the spokesman, and his message was “Buy a car, get a check.”

It has been that way ever since. If any company has any thoughts about stopping, all it has to do is try and it will see the competition take advantage immediately.

Customers love rebates. Look at any newspaper and see all the incentives and coupons. It is obvious that cents-off and incentives are a way of life in the retail business. It’s simply a way of doing business.

Meanwhile, everyone will see costs go up, either a little or a lot. Security is a cost that must be added to the price of cars and trucks just as it is added to the price of airline tickets. The challenge will be to get the customer to accept those added costs without losing sales.

The industry still must build vehicles that consumers feel they can’t do without. The best way to avoid rebates is to have the hottest vehicles, vehicles the public wants and is willing to pay for. That’s not always an easy task. The product is still king, and nothing will change that.

But marketing in the short term will become even more important, to convince a reluctant consumer that now is the

time to buy a car or truck. It’s still a challenge.

You can reach Keith Crain at kcrain@crain.com

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