In honor of 4th of July, it looks like June was a very good month for the big three auto makers. All 3 US manufacturers saw significant gains over June 2010. Ford increased sales by 14% and GM by 11%. However, the big winner was Chrysler with a sales increase of 30%! Now they had plenty of room for improvement, but still. If there were winners, there had to be losers. In this case, it was Honda and Toyota. Both saw sales decrease by more than 24%, this can be attributed to the earthquake and tsunami that severely damaged their facilities in Japan and limited production/delivery of critical parts.
So how can you use this information to your benefit? Toyota and Honda will want to reclaim their top positions and with their supply chain coming back online in Japan, they will have the inventory to begin selling more cars. I also anticipate an increase in incentives to entice buyers. Previously, the Japanese had relatively low levels of incentives in order to preserve inventory. Now that inventory levels are increasing, Toyota is offering 0.0% financing for several models up to 36 months (Camry up to 60 months!) or $1,000 cash back. Honda is offering 0.9% financing for nearly all models for up to 60 months, but no cash back. Both are offering lease incentives too which have been missing for quite some time. The US manufacturers will also want to keep their place on top, so look for them to continue their incentives.
The current level of incentives is well below the historical average. This won't last forever, so I'd anticipate and increase in incentives to drive more buyers to purchase new cars. It's an intense competition between all the manufactures and we as consumers stand to benefit. Let the games begin!!
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