Vehicle makers spent less on incentives in April and paid the cost with weaker-then-expected sales, prompting some analysts to expect richer deals in coming months. According to Reuters, industry research firm Autodata said in its monthly report on Wednesday that incentives across the industry averaged $US2,994 per vehicle in April, down from $3,029, despite some high-profile incentive offers. General Motors again led the industry with an average of $4,229 per vehicle, but its incentives also fell slightly from an average of $4,266 in March, despite its “Truckfest” programme, the report added. Reuters said “Truckfest” included up to $4,500 cash back and interest-free financing for loans of up to five years but GM officials said that the costs of that programme were countered by fewer incentives on leased vehicles. The news agency noted that sales across the industry rose less than 1% in April from the previous year, far less than the 3% to 5% gain that analysts had expected. Reuters said Ford and Chrysler both trailed GM, but both have adjusted their incentives slightly this month, and analysts expected the sales programmes to become more enticing as carmakers strive to keep their inventories of unsold vehicles from growing. Access the most comprehensive Company Profiles
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“April’s demand disappointed, driving inventory levels even higher. We expect a meaningful acceleration in incentives in May and June,” Merrill Lynch analyst John Casesa reportedly said in a research report on Wednesday. Reuters said that Ford is offering a cash rebate of $3,000, or $2,000 and interest-free loans for up to five years, on its Explorer, Expedition and Excursion sport utility vehicles and the Freestar minivan while Chrysler is offering $3,500 cash back on its Dodge Durango SUV – and is also offering cash rebates of up to $2,000 on its new flagship sedan, the Chrysler 300 and 300C, according to incentive data sent to dealers. Ford’s incentives averaged $3,519 per vehicle in April, down from $3,604 in March, while Chrysler’s incentives slipped to $4,030 from $4,181, Reuters said, citing Autodata. Ford’s sales of its US brands fell 4.6% in April, while Chrysler’s sales rose 1%, the news agency added.
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