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Automakers Reduce U.S. Incentives in April to Five-Year Low

May 4, 2011
2 min to read


Automakers reduced spending on discounts and incentives for U.S. customers in April by 14 percent to an average $2,320 per vehicle, the lowest in more than five years, as sales climbed.


Ford Motor Co. average spending on discounts and promotions declined 20 percent from a year earlier to $2,399, Woodcliff Lake, New Jersey-based Autodata Corp. said yesterday. Chrysler Group LLC lowered spending 23 percent to $2,806, and General Motors Co. reduced incentives by 8.1 percent to an estimated $3,068 per vehicle.

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Industrywide light-vehicle sales ran at a seasonally adjusted annual rate of 13.2 million in April, Autodata said, accelerating from a year earlier and exceeding the 13 million pace that was the average estimate of 12 analysts surveyed by Bloomberg. Incentives are likely to continue dropping in the coming months due to Japan-related supply shortages, said Jesse Toprak, vice president of industry trends at TrueCar.com.


“The outlook for incentives is that they are going to be down dramatically,” Toprak, whose auto-pricing website is based in Santa Monica, California, said yesterday in a telephone interview.


General Motors Co. reduced incentives by $272, or 8.1 percent from a year earlier, to an estimated $3,068 per vehicle. Toyota Motor Corp., the world’s largest automaker, reduced spending $60, or 3.1 percent, to an estimated $1,885 per unit, Autodata said.


Honda Motor Co., fourth in the U.S. sales by volume, raised incentives to $2,171, 8.7 percent more than a year earlier, according to Autodata. Nissan Motor Co. reduced discounts by 33 percent to $1,998.


The last month that industrywide average incentive spending was lower was October 2005 at $2,204 per unit, David Lucas, an analyst for Autodata, said in an e-mail.


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