The mayor of Warren, MI has the answer to The Big 2.8's woes. The MacComb Daily reports that in a letter to the Michigan Congressional delegation, Mayor James Fouts called for the reinstatement of the federal income tax deduction for interest on auto loans. "More new vehicle sales means more jobs, less unemployment and lower government costs to assist the unemployed," Hizzoner reasoned. Representative Candice Miller thinks "the mayor's idea is very creative." What neither of them seem to realize is that all of the Detroit manufacturers have offered 0% interest rates– and these promotions haven't exactly set sales records. Deducting the interest wouldn't have any effect on payments, and that's what floats buyers' boats. Also, Mayor Fouts better be careful what he asks for. The resulting legislation would be  industry-wide. It would likely hurt the American manufacturers more than it would help them.

It sucks to be a Chrysler brand franchisee right now. Trucks and SUVs are piling up on lots as dealers try to come up with ways to clear the inventory before the '09 models start rolling in. They have their work cut out for them. At the start of July, Chrysler/Dodge/Jeep dealers had a 160-day supply of Rams gathering dust. If that weren't bad enough, the stores have enough Nitros to last 143 days and enough Aspens to last a lifetime. I mean, 218 days. The Jeep Wranglers they couldn't keep on the lot just a year ago are now piled up 129 days deep. With an average of only 16 truck sales per Dodge franchise, 10 per Jeep franchise and four per Chrysler franchise in June, it may take them a while to dig their way out. But, as they say, misery loves company. Honda dealers are sitting on a 160-day supply of Ridgelines and Mitsubishi dealers are dealing with a 222-day supply of Endeavors. Nissan blows them all out of the water, though. If a 215-day supply of Xterras, a 229-day supply of Armadas and a 247-day supply of Pathfinders aren't enough, the "Lot Queen" crown goes to Titan: there's a four hundred eighty-nine (yes, 489) day supply of the Mississippi-made haulers sitting around. Blow-out clearance sales can't be far behind. 

Gentlemen, start your engines. And head out to Nevada. The Shady Lady Ranch, located in a trailer 31 miles north of Beatty, Nevada, is offering a promotional sale. To cover the cost of gas for the 150-mile drive from Las Vegas, if you spend $300 at the legal brothel, they'll throw a $50 gas card your way. Three hundreds bones buys you an hour with one of their shady ladies, including (according to the website) Rio, Electra, and Dakota. In the first week, they gave out $1000 worth of gas cards. The downside: the 40-minute "quick man" special ($200) does not qualify customers for the gas rebate. As we already know, the cost of diesel has been pounding Nevada's brothel industry, especially in respect to truckers' custom. While this "let's keep America, uh, smiling" campaign may not solve the transportation-to-hookers problem, it should at least soften the blow. So to speak.

Is anyone surprised? Automotive News [sub] reports that GM is extending the 0% financing for everyone deal through July 7. The conditions are the same: 0 percent financing on most vehicles if you're able to make it through a dealership's door under your own power. Dealers who have increased floor traffic are happy because they're even selling SUVs and full-sized pickups. GM spokesman Pete Ternes said they'll "heavily advertise and promote the sale, especially over the July 4th weekend." With the problems GMAC is already having, giving away money for the next six years can't help their situation. And practically giving away the inventory can't be making GM much money, either. Hole. Digging. Stop. Meanwhile, GMAC is launching a "rate incentive program" on select GM Certified Used Vehicles, including the Chevrolet Impala and Malibu, but especially SUVs. "Well-qualified customers also can receive GMAC 4.9% APR financing for terms up to 60 months on 2003-2008 models of Chevrolet Trailblazer, Tahoe and Suburban; GMC Envoy, Yukon and Yukon XL; Pontiac G6; and Buick Lacrosse vehicles at participating GM Certified Used Vehicles dealers." Yeah, that'll work. 

GM has stated publicly and repeatedly that they're fully committed to cutting back on incentives. Unfortunately, as the saying goes, what they're doing shouts so loud we can't hear what they're saying. Automotive News [sub]  caught wind of a conference call between GM dealers and Marketing Maven Mark LaNeve. GM's [non-PHEV] volte face starts tomorrow, when the ailing automaker will offer 0 percent financing for 72 months on "most Chevrolet and Buick-Pontiac-GMC products." On a $30k rig, that’s about $8100 in savings versus a standard 9 percent rate. If you're buying instead of leasing, The General will add in another $500 in bonus cash (they have to clear the lots before the 2009s start rolling in with their 3.5 percent price increase). And yet, with so many lightly used trucks and SUVs on the market– many with a great GM warranty– even this offer may not move the needle. GM's facing disaster; some analysts reckon their sales could tumble by 28 percent in June. Hence the fact that the special financing will run until they sell something June 30. Or longer. Meanwhile, LaNeve also revealed that his employer's hired Citibank to help it "complete their study" on HUMMER and they're open to "all options" for the brand. Except incentives? Go figure.

With inflation around 30 percent, interest rates over 20 percent and fuel at all-time highs, auto dealers in Sri Lanka are facing worse times than their American counterparts. (And that's saying something; ChyrCo's U.S. sales are down 19.3% year-to-date, 25.4% in May.) One dealer is trying a time-honored tactic to move the metal: a buy-one-get-one-free promotion. Lanka Business Online (LBO) reports that Diesel and Motor Engineering company (DIMO) is offering a free Tata Xeta when you buy a new Jeep 4×4 or Chrysler Grand Voyager van. Chryslers aren't selling in Sri Lanka because of "their high prices and maintenance costs and consumer preference for cheaper rival brands." LBO also points out they have lower fuel economy ratings than other cars, because "Chrysler is a US firm, where fuel has been lightly taxed compared to the rest of the world." DIMO said the promotion should also "help liquidate the stock of older models of the Xeta." Perhaps U.S. Chrysler dealers should try a reverse tactic: buy a Caliber, Sebring or Compass and get a Durango, Aspen or Commander free.

Much digital ink has been spilled over Chrysler's "refuel America" promotion. The deal locks fuel prices at $2.99 per gallon for the first 12k miles for each of three years (subject to acres of fine print). Consumer Reports took a closer look. Over the first three years of ownership, the cheap gas gives Chrysler a competitive cost of ownership. After five years, your Chrysler will have cost you between $1k and $8k more than its competitors.  That's driving 12k miles annually, based on CR's "real world" mileage ratings and total ownership cost analysis. It gets worse. The cost of owning a gas-carded Chrysler is higher than buying the same vehicle with the optional zero percent interest rate. The Hemi-equipped gas hogs, for example, cost over $6k more with the gas card during five years of ownership. Little wonder then, that under ten percent of Chrysler buyers are choosing the gas card. The upshot? CR suggests that if you must buy from the Pentastar, take the low interest rate. "However," they say, "we would recommend you consider all vehicles in the segments, as there simply are better choices available based on our testing and analysis." Ya think?

If the Board of Directors at GM and Ford want to pay their CEO a billion dollars a year to run their companies into the ground facilitate their turnaround, far be it for me to tell them they should do otherwise. But if you're looking for a reason why these two automakers are on an engine out terminal approach, clock those annual pay packages and remember that they are the tip of the iceberg of over-paid unaccountability. Add in the rest of their executives' compensation and you have a culture of entitlement that makes Moctezuma's priests seem like chimney sweeps. The info [via The Detroit News] raises at least two important questions. First, why were we thinking that GM CEO Rick Wagoner earned $14.4m last year ($1.3m less than today's report)? Second, what was all that about Ford CEO Alan Mulally's pay being front-loaded to account for the fact that he left Boeing behind? Big Al's '07 $22.7m comes after last year's $28.2m. I make that $51.4m for two year's work. There are lot of other ways to crunch those numbers, as even the DetN feels it must. Wagoner's 64 percent rise "followed the posting of a $39 billion loss in 2007, a year when GM's stock price fell by about 19 percent, without adjusting for dividends." The DetN forgets to provide the same info for Ford. FYI FoMoCo lost $2.7b ($3.5b in NA) in '07 and their share price dropped 10.4 percent. Nardelli? Chrysler? That information is privileged…

The New York Times has a story on car nut Fred Heiler and his son Tim. It seems that Tim wasn't quite living up to his potential in middle school– thanks to girls and video games. But his progeny's Cobra love led to a parental epiphany: "'O.K., bud,' I said in a weak moment, 'if you get on the honor roll and stay on throughout high school, we'll buy you a Cobra kit when you graduate.'" The incentive worked: "Indeed, he began to apply himself in school, and in a couple of marking periods we got a congratulatory note and an honor roll sticker with his report card…. Good grades became the norm all through high school. Tim graduated with honors in 2006. True to his word, Fred bought a Cobra kit from E.R.A. in Connecticut. Father and son built the car together in the garage. "With Fleetwood Mac or Green Day blasting, we'd chatter about car stuff, school or music while we worked, but at other times we'd proceed without speaking, anticipating each other's moves and handing each other the right tools at the right time." The two shade tree mechanics plan to attend a safe driving school together this summer. Cobra? Driving school? Sounds like a plan.

Go to Butler, Missouri and you'll find Max Motors, an independent car dealer that specializes in (i.e. only sells) American cars. Yup, under one roof you can buy a Buick, Cadillac, Chevy, Chrysler, Dodge, Ford, Jeep or Pontiac. Your guess is as good as mine if they sell Korean-made Aveos, Mexican made Fusions or Canadian made all sorts of stuff. Oh wait, I checked, they do. But that's not why we're telling you about Max Motors. No, we're telling you because through May 31st if you buy a new car from Max Motors you get your choice of free gas card or handgun. That's right, Max Motors is aware of both "the gasoline and crime problem [sic] in America." And while to some throwing gas at a gas problem and guns at a crime problem is like throwing fire at a fire problem or fat at a fat problem, Max Motors sees it different. Explains sales manager Walter Moore, around Butler people believe in "God, guts and guns," though they aren't handing out free Bibles or chitlin's. As you would (probably) expect, 80 percent of the customers are opting for the gun. And hey, why not? I just traded my Colt Python .357 Magnum for $250 worth of scotch and bourbon. The only drawback we see is that you don't get the gun immediately (you have to pass a background check). Max Motors might be inadvertently setting up the world's most ironic carjacking.

Chrysler's "Refuel America" promotion guarantees $2.99/gallon gas, diesel or E85 for three years. The deal was originally set to expire on June 2. The Detroit News announces that the struggling automaker's extending the offer through July 7. It sure sounds like a good deal… you get a gas card that's linked to your Visa or MasterCard credit card (no debit cards). When you buy gas, your card is billed at $2.99/gallon and Chrysler pays the rest – within certain limits. The cap is capped at the amount of fuel needed to go 12K miles based on the EPA combined mileage for your vehicle. If you try to use your gas/E85 card to buy diesel, or have a diesel card and try to buy gas/E85, you're charged "full pump price plus a $2 service fee per transaction." If gas drops below $2.99, you'll be charged at the lower price BUT the purchase will count against your annual allotment. Once you exceed your annual allotment, you'll be charged the full price until the next year's allotment kicks in– but if you don't use all of this years' allotment, the remainder is forfeited when the new allotment is activated. Oh, and if you follow all the rules and buy a Dodge Durango (the thirstiest car Chrysler sells excluding the excluded SRT models and Dodge Viper), you'll save around $600 a year, depending on local gas prices. Oh, did I mention you may have to forfeit other, more valuable incentives to qualify? Someone, somewhere is laughing.

Good luck buying an Audi R8. There's an 18-month– or longer– waiting list. Or you could pay dealers demanding a $50 – $80k price premium. Hence the reason that Automotive News' [sub] industry-wide list of factory incentives set off my WTF alarm. As usual, a handful of Audi finance deals are listed under the VW heading. Until July 2, Audi dealers are offering the Audi A3, RS4 and S4 with 2.9 percent financing (qualified buyers, first born as collateral, etc.). Ingolstadt's American minions are also offering 0.9 – 2.9 percent financing on A4s. And well-heeled enthusiasts can pick-up an $109k (six-speed, base) Audi R8 with 5.34 – 5.85 percent financing. AN didn't list any specifics: length of financing, down payments or whether it was a purchase or lease. And Audi's web site doesn't list the deal with their other "special offers." So now I'm wondering: if they're in such short supply and such high demand, why would Audi be offering finance deals? And would that finance rate really sway someone shopping the $100k+ market to buy an R8 over a Porsche 911 Turbo?  

According to The New York Times, Big Apple mayor Michael Bloomberg is about mandate that the City's 10k car service limos must average 25 mpg by 2009 and 30 mpg by 2010. As the vehicles in question currently average between 12 and 15 mpg, they'd almost certainly require hybrid drivetrains to achieve Bloomberg's lofty goals. The plan requires approval by New York's Taxi and Limousine Commission. Passage seems likely. Commissioner Mathew W. Daus' says "it is to the great credit of black-car industry leaders that they have collectively embraced Mayor Bloomberg's efforts to reduce harmful emissions." Daus' willingness to green-up may something to do with the fact that Hizzoner isn't going force limo companies to comply with the new standards through punitive fines. Instead, Bloomberg is proposing a state sales tax waiver on purchases of more efficient limos and low-interest financing, through corporate partnerships with Deutsche Bank, Lehman Brothers, and Hudson Toyota/Penske Auto Group. 

According to The New York Times, GM has confidence that Cerberus will fix GMAC. GM CFO Fritz "What Me Worry?" Henderson played down Cerberus chairman Stephen Feinberg's recent warning that "things could get a lot worse" at the finance company. While acknowledging GMAC subprime mortgage market struggles (how could he not?), Fritz believes GMAC has the cash reserves to see them through the current crisis. More to the point, GM's Chief Beancounter says GMAC won't need additional cash from GM. In fact, "We expect that GMAC will turn a profit in 2008." (That's three years before Fritz' predicted return to profit for GM.) Fritz didn't comment on Standard & Poor's recently GMAC and ResCap downgrade, which lowered both to junk-bond status, raising their cost of borrowing. While the storm clouds gather over the troubled lender, GM is doing what they can to help GMAC return to profitability: continuing to offer zero percent financing on a number of vehicles. We'd appreciate a heads-up from our dealer readers as to whether or not they've tightened credit requirements for these killer deals…