International Auto Brands In U.S. Join Sales Incentive Wars
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MORE: New Car Rebates and Incentives
Washington DC March 16, 2009; The AIADA newsletter reported that with only a few holdouts, international car brands are leaning heavily on incentives to avoid ballooning inventories of unsold vehicles.
Luxury brands such as Mercedes-Benz, Infiniti, and Lexus have increased incentives sharply to control inventories despite collapsing sales.
Edmunds.com says Mercedes' incentives per vehicle averaged $4,185 in February, up nearly 80 percent from the February 2008 figure. Meanwhile, Lexus' incentives totaled $3,402 per vehicle, quadruple the year-ago average. "Everyone is fighting for market share because there are fewer buyers in the marketplace," says Jessica Caldwell, an analyst with Edmunds.com.
"Even the luxury players are turning to incentives to pump up volume." The automakers' actual inventories — a collective 2.9 million units for the international and domestic brands — are not sky-high compared with past years.
Automotive News reports a year ago, industry inventories stood at 3.5 million units. But at the current dismal sales pace, it would take 101 days for dealers to move that much metal.
