US auto slump moves beyond the Big Three
With sales down 1.3 percent so far, the Japanese boost rebates. But a few US models shine.
from the June 5, 2007 edition
Page 2 of 3
In response, carmakers are trying to lure buyers with better lending terms.
"The incentive spending that's going on is focusing more on leasing and financing, rather than cash rebates," says Mr. Rosten.
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At the same time, a solid US job market means that car shoppers are still looking for more than just low payments and high mileage.
That tilts the playing field toward carmakers rolling out good new designs.
"The market's becoming more competitive," says Tom Libby, an auto analyst in Troy, Mich., at market-research firm J.D. Power and Associates. "There's a big contrast among the companies' performances."
The overall pie has been shrinking slightly, with sales on track to remain relatively healthy, above 16 million units for the year in the US.
But compared to this time last year, 2007 unit sales are down 1.3 percent.
In this environment, most of the major carmakers are tacking on larger incentives to move vehicles off the lot.
The biggest givebacks come from the Detroit-based threesome of GM ($2,963 per vehicle in May, according to Edmunds), Ford ($3,040), and the Chrysler Group ($4,050). As Chrysler struggles to move excess inventory, parent company DaimlerChrysler of Germany is moving to sell Chrysler to Cerberus, a private investment fund.
But Honda's incentives have soared by the most dollars per car: from $922 a year ago to $1,399 in May. Toyota's incentives are also up, to $1,140 per car. Givebacks totaled $2,083 at Nissan, the smallest of the "big six" car sellers.
With buyers putting a new premium on fuel economy, Toyota has been the big winner in the US market. The company is passing GM this year as the leader in global sales, and its US sales are likely to pass Ford, coming in second only to GM with American buyers.
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