Increased demand in response to high petrol prices, compounded by supply shortages, is making it harder to get large incentives to buy a small car, according to US buyers guide Edmunds.com.
It said manufacturer incentive spending for compact cars fell 23% in the last month, and incentives on subcompact cars fell 14%.
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However, average incentive spending across the entire industry fell just 0.7% in May to an average of $2,094 per vehicle sold though incentives are at their lowest levels since 2005. The industry’s total aggregate incentive spending this month was estimated at about $2.3bn, down 5.8% from April.
“The continuing market shift toward small fuel-efficient vehicles is keeping overall automaker incentives at the lowest levels we’ve seen in years,” said Jessica Caldwell, Edmunds’ director of industry analysis. “These low incentives are making it increasingly difficult for consumers to find good deals on small cars. But on the other end of the spectrum, we’re seeing better offers on large vehicles that have taken a hit in demand.”
The largest drop in incentive spending last month came from Honda which Edmunds reckons is increasingly looking like the biggest victim of the March earthquake in Japan among all automakers. The company dropped its incentive spending 46% in May as prices of its top two models – the [just-redesigned] Civic and Accord – have each climbed over US$1,000 in the last two months. Overall, Japanese automakers decreased incentive spending $334 in May to $1,351 per vehicle sold.
“Interestingly, with the exception of Honda, we aren’t seeing a huge pullback of incentive spending by the Japanese automakers, which may indicate that they’re not quite as concerned about their supply as they were just weeks ago,” said Caldwell. “Toyota’s average incentive spend fell from April levels, but the company actually boosted incentive programmes part way through May. And Nissan, in fact, increased its spend almost 10%.”
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