Incentives Incentives Incentives Not Just For US Cars Any More

DETROIT September 8, 2003; John Porretto writing for the AP reported that the Big Three automakers and their Asian competitors had far different U.S. sales last month, but there was a common theme -- the foreign companies, like the domestics, used heavy incentives to lure buyers.

Toyota Motor Corp., which outsold DaimlerChrysler AG's Chrysler Group in the United States for the first time in August, raised incentives 73 percent from a year ago, Deutsche Bank Securities analyst Rod Lache said in a report Monday.

Even compared with July's heavy spending, Toyota and Honda Motor Co. beefed up incentives 12 percent as they, like the rest of the industry, tried to sell off remaining 2003 models.

A Merrill Lynch report says incentives among Asian automakers, led by Toyota, rose 33 percent in August from a year ago.

The result: Asian brands saw sales rise 8 percent in August, while General Motors Corp., Ford Motor Co. and Chrysler had an overall drop of 6 percent.

August's seasonally adjusted annual sales pace of 19 million vehicles was the highest since October 2001.

Industrywide, the average manufacturer outlay per vehicle was $3,004 in August, down from $3,029 in July but 52 percent higher than August 2002, according to Autodata Corp.

While Asian brands increased incentives recently, their average spending per vehicle still falls well behind GM, Ford and Chrysler. At the Big Three, the average outlay in August was about $4,000 a vehicle; the average among Asian brands was $1,474.

U.S. market share for GM, Ford and Chrysler fell to an all-time monthly low of 57.9 percent in August. In the first eight months of the year, the Big Three's total U.S. market share was 60.1 percent, down from nearly 62 percent a year ago.

At the same time, Asian brands increased their U.S. share from 31.3 percent to nearly 33 percent. European companies are up to 7 percent of the U.S. market from 6.8 percent a year ago.

GM, which started the incentives battle soon after the Sept. 11, 2001 terrorist attacks, said last week it would carry over most financing and cash-back deals on 2003 models until Jan. 2. It's also offering zero-percent or low-interest financing and rebates on a variety of 2004 models.

Chrysler said it also will offer incentives on most 2004 model-year vehicles as it attempts to boost U.S. sales.