US Automakers Offer Increased Incentives at the End of Year image

At the end of year, automakers are offering very attractive incentives on cars and trucks.

Last week a sign in front of Matthews-Hargreaves Chevrolet in Royal Oak said “Rebates up to $8,000”, Southfield Chrysler offers about $4,000 off for 2012 Chrysler 200 sedans, while Ford has an offer of almost $5,000 off at some 2013 Taurus models. But analysts say that this year’s incentives levels are not even close to the full-scale incentive wars which pushed Detroit’s automakers into bankruptcy.

“An all-out war is really not what we’re going to see,” said analyst Jesse Toprak of TrueCar. “It’s probably going to be isolated battles for certain categories of vehicles. This month, for example, were seeing heightened battle for the truck segment.”

At the end of November GM had a 103-day supply of trucks and a 146-day supply of its GMC Sierra pickup, compared with Ford’s 76-day supply of trucks. GM is offering incentives of up to $9,000 for some 2012 Sierra models. GM’s average incentive on all its vehicles dropped almost $400 year-over-year in November, according to J.D. Power’s Power Information Network.

“We went harder (this month) because we missed on November,” said GM North America President Mark Reuss, adding that some competitors were offering nearly $2,700 more off their trucks last month than GM.

Chrysler’s average incentive reached about $300, but Chrysler sales chief Reid Bigland said that the company’s strategy is consistent, methodical and disciplined. Ford’s average incentive dropped about $300 in November and Ford sales analyst Erich Merkle said that the fall was due to the company’s determination to match production with demand. The company said that despite modest incentive offerings, the F-Series is about to become the US best-selling trucks for the 36th year in a row. Toyota’s average incentive surpassed $550 in November, as the automaker’s inventories were tight in 2011 due to the natural disasters which hit Japan.

“In those segments, Toyota took sales domination for granted for many years. They can’t anymore. There are too many worthy competitors. Those segments are the most competitive that we’ve ever seen,” said TrueCar’s Toprak.