US automakers set to up incentive offers on new cars

(AFP PHOTO / Robyn BECK)

US consumers looking for a good deal on a new American-built car could be in luck this month, according to a monthly report from influential auto magazine Edmunds.com.

The publication suggested August 2 in its monthly analysis of incentives that a surge in incentive spending by Japanese automakers in July could mean that US automakers will also have to spend more.

Incentives are the term used by the industry to refer to 'sweeteners' used to entice buyers into parting with cash, typically rebates, lease programs and subvented interest rates.

According to Edmund.com's calculations, Japanese spending on such deals jumped nearly 25 percent between June and July, to an average of $1,990 for every vehicle sold.

Spending by US automakers, by comparison, increased by just 4.9 percent over the same period, to $2,919 per vehicle.

Edmunds.com said US automakers cut the amount they spent on discounts in the wake of the Japanese earthquake, but may now need to up their game.

"With production working its way back to normal, the Japanese are making a strong play for their lost market share and American automakers may need to kick in more incentives as they fight for more consumers," she explained.

In total, the auto industry is still spending 14 percent less on incentives than it did a year ago, a total of $2,371 per vehicle in July.

General Motors spent the most of the major automakers in the top six, a total of $3,198 per vehicle, while Hyundai spent the least, at $843 per vehicle.

http://www.autoobserver.com/2011/08/japanese-brands-boost-incentives-spend.html