Sweet deals lure car buyers in US

[csv8]

Sweet deals lure car buyers in US
DAN STRUMPF AND DEE-ANN DURBIN
April 3, 2010 - 3:54PM
AP

It's a buyer's market for car shoppers in America, with good deals expected to last at least another month as automakers continue to match Toyota discounts that lured thousands of buyers in March.

Seeking to repair the damage from a series of safety recalls, Toyota Motor Corp offered unprecedented incentives last month, including low-interest financing and free maintenance for returning customers.

The deals worked so well that Toyota's US sales jumped 41 per cent and the automaker sold just 1,683 fewer cars than General Motors Co, the closest it has ever come to overtaking GM in monthly sales, according to auto research site Edmunds.com.

GM and other automakers matched the deals, boosting the industry's sales by 24 per cent compared to the same month a year earlier, according to figures released on Thursday and compiled by AutoData Corp.

Incentives were the main factor for Jason Lopez, 26, a Toys R Us manager from Brooklyn, New York, who bought a 2010 Camry last month after his mother told him about the deals. Lopez spent about an hour researching which cars were affected by the recalls but he trusted Toyota's reputation.

"I know it's safe," he said. Lopez paid $US20,800 ($A22,680) for the car, which was listed at $US23,115 ($A25,204).

Industry incentives averaged $US2,742 ($A2,989) per vehicle last month, according to Edmunds.com. That was down $US423 ($A461) from record-high levels a year earlier, when the economy was faltering and automakers saw one of the worst sales months in nearly 30 years. Incentives this March rose $US100 ($A109.04) from February.

The big change last month was Toyota, which normally limits sales promotions but resorted to them after recalls of more than 8 million vehicles worldwide for problems involving brakes and accelerator pedals.

Toyota's incentives hit $US2,256 ($A2,459) per vehicle, their highest level ever, up nearly $US700 ($A763) from the year before. Toyota's incentives averaged $US1,700 ($A1,853) before the crisis began last fall, said Jesse Toprak of auto pricing site TrueCar.com.

Toyota is offering current owners interest-free financing for 60 months on the popular Camry sedan. On a base model with automatic transmission that costs $US21,395 ($A23,328), the financing would save a buyer $US3,722 ($A4,058) compared with the average new-car interest rate of 6.5 per cent.

Leasing may be April's incentive battleground. Honda recently added a $US250 ($A272.60) per month lease on an Accord with nothing down. Toyota is offering $US169 ($A184.28) per month on Camrys for three years with $US1,999 ($A2,179.7) down.

Toprak said the sweet lease deals are likely to continue for many months because automakers have access to inexpensive money. High demand for used cars also has driven up resale values, so automakers can afford better deals.

Toyota's incentives are scheduled to run through Monday, but Don Esmond, senior vice president of automotive operations at Toyota Motor Sales USA, said that some are likely to extend beyond that date. Toyota executives will evaluate market conditions over the weekend and decide.

"We needed a little bit of a kickstart to get the market in our direction," he said. "We're not going to walk away from our customers."

Toyota also continues to face lingering questions about its safety record. This week, the federal government announced an investigation to see whether electronics caused sudden acceleration problems in Toyotas and other cars.

Honda Motor Co has already matched Toyota's incentives through May 3, so automakers will be forced to compete through April. And new deals are in the works. Ford Motor Co plans to announce a new program next week that will offer cash to switch to a Ford.
(My comment : Maybe Ford Aus should do this ???)
Eventually, however, incentives will drop because automakers are limiting production more than they used to so they don't have large inventories to get rid of, according to Jessica Caldwell, an industry analyst for Edmunds.com. That could lead to lower sales because consumers have been trained to wait for deals.

The flurry of incentives has made it tough for automakers to gauge the strength of the industry's recovery. Sales rose 15.5 per cent in the first three months of this year, but some of that was due to heavy fleet sales, which are less profitable for automakers.

Ford's chief economist, Ellen Hughes-Cromwick, said the industry is on track for sales of 11.5 million new vehicles this year, one million more than 2009, but far below the 17 million sold five years ago.

Toyota's recovery is tenuous, too. James Bell, an analyst with auto pricing company Kelley Blue Book, said Toyota can successfully attract bargain-hunters and loyalists. But other buyers who might have considered Toyota are now looking at a variety of brands.

"The elephant in the room for Toyota is what happens after this incentive ends," he said.

GM reported 21 per cent jump in new vehicles sales for the month. Without the four brands GM is shedding - Pontiac, Saab, Hummer and Saturn - Toyota would have beaten GM for the month. Ford's sales climbed nearly 40 per cent on strong demand for the Fusion and Taurus sedans, while Honda's rose 23 per cent.

GM, however, recaptured the top spot from Ford, which outsold GM in February.

Sales at Subaru shot up 46 per cent, while Nissan Motor Co's sales rose 43 per cent. Hyundai Motor Co's sales rose 15 per cent.

Chrysler Group LLC, which has few new products, continued to struggle, with sales down 8 per cent.

© 2010 AP

[calais]

I have only just returned from the USA and the incentives to buy a particular brand was just unreal.

Free Servicing
Discounts just for trading a certain make/model in (like a manufacturer to manufacturer backstab)
Free insurance
Ridiculously low rate finance

I guess you can find deals like that anywhere in Australia too, but over in the USA it's a free for all. You have dealers climbing over each other to get your business.

I went to a ford dealer in Fresno to test drive a Mustang (who wouldnt?), and the bloke wanted to give me the car for a week to see how I liked it. When I explained I was an Aussie on a 14 day working trip, he STILL wanted to give me the car for a week. Needless to say I took the car for a looooong drive, Sequoia National Park : I was stunned the bloke suggested it!

I guess their bottom lines are getting just that bit lower.

[jpd80]

Or try this,
New Toyota RAV4, $199/month with no money down, same thing is $600/month in Australia

[Franco Cozzo]

Originally Posted by calais

I have only just returned from the USA and the incentives to buy a particular brand was just unreal.

Free Servicing
Discounts just for trading a certain make/model in (like a manufacturer to manufacturer backstab)
Free insurance
Ridiculously low rate finance

I guess you can find deals like that anywhere in Australia too, but over in the USA it's a free for all. You have dealers climbing over each other to get your business.

I went to a ford dealer in Fresno to test drive a Mustang (who wouldnt?), and the bloke wanted to give me the car for a week to see how I liked it. When I explained I was an Aussie on a 14 day working trip, he STILL wanted to give me the car for a week. Needless to say I took the car for a looooong drive, Sequoia National Park : I was stunned the bloke suggested it!

I guess their bottom lines are getting just that bit lower.

Wow, I went to a Hyundai dealership last year to test drive the i30 and the receptionist took my license and got me a salesman, who politely told me to get F'd (If you arent buying today then Im not going to let you test drive) then went back to cooking his sausages.

[Nikked]

This massive discounting couldn't be too good for profits though?