Incentives war boosts sales at most big automakers
DETROIT (AP) – An incentive war touched off by Toyota boosted sales at most major automakers last month.
The deals brought out car buyers, as Toyota’s generous rebates and low-interest financing to counter safety-related recalls forced rivals to respond. Toyota will report sales later Thursday, but a top company executive said sales jumped 40 percent in March.
GM reported a 21 percent jump in new vehicle sales on Thursday, while Ford’s climbed nearly 40 percent and Honda rose 23 percent over last March, when economic uncertainty and rising unemployment kept buyers from showrooms. Sales at Hyundai and Subaru also rose, but Chrysler continued to struggle with sales down 8 percent.
For years automakers have pledged to reduce incentives and sell on the strength of their products, but most haven’t been able to stick to the plan because of competition.
GM sales from its four core brands – Buick, GMC, Chevrolet and Cadillac – rose 43 percent to 188,546. Redesigned vehicles like the Chevrolet Equinox midsize crossover and Buick LaCrosse luxury sedan saw strong sales.
GM, which is shedding Pontiac, Saturn, Saab and Hummer, sold 3,100 car and trucks from those brands last month compared with over 27,000 a year earlier, when more of those vehicles sat on dealer lots.
There were conflicting reports on just how much GM spent on incentives.
Susan Docherty, GM’s marketing chief, said the automaker’s incentive spending dropped in March, and for the first time on record is below the industry average.
Citing data from the research firm J.D. Power and Associates, she said GM’s March incentive spending was $2,800, down $200 from February and $2,000 less than March of last year.
But the industry analysis firms TrueCar and Edmunds.com predicted that GM’s March incentive spending would lead major automakers at more than $3,500 per vehicle, well above the industry average of roughly $2,800.
Toyota’s incentives followed recalls of more than 8 million cars and trucks around the world mainly, beginning in October, due mainly to reports of unintended acceleration. The company blames the problem on gas pedals that stick or become trapped under floor mats. Repairs have been made to millions of the recalled vehicles.
Company sales fell 9 percent in February, before it launched its aggressive incentives. The broader industry’s sales climbed 13 percent that month.
The automaker is to update its incentives on Monday but has said some of its incentives would continue.
Ford’s share of the retail market – sales to individual buyers – rose for the 17th time in the last 18 months.
Its midsize Fusion sedan set a sales record in March with sales up 79 percent compared with the same month a year earlier.
Hyundai’s sales rose 15 percent, propelled by sharply higher demand for its newly released Sonata sedan and its Tucson small SUV.
Industry sales tanked in March of last year as the economy slowed, layoffs rose and GM and Chrysler headed into bankruptcy protection. Last March was among the worst auto sales months in decades.
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