Sales Dip, But So Do Incentives

Overall, sales of new vehicles has been in decline at the beginning of 2018 and automakers are following suit by offering less incentives for new car buyers, In February of 2018 there were $65 less spent on incentives by automakers than the same period in 2017, according to J.D. Power. Sales of new vehicles were down 2.3% during this period compared to just 12 months ago.

During the last auto sales down turn automakers did the just opposite: they offered more incentives as sales declined which led to more inventory and resulted in weak profits for the companies. It appears that automakers have learned their lesson this times around, changing their tune. Mark LaNeve, a VP at Ford Motor says that, “This is really a change from…the last three years,” when automakers boosted discounts.

Sales were not down across the board as Toyota reported an increase in fleet sales due to the redesigned Camry. Also, Lexus has lifted incentives higher to keep up with the competition. AutoTrader speculates that companies are instead targeting their incentives rather than incentives across the board.

The spring selling season starts later this month so it will be interesting how consumers will act toward the lack of incentives and if automakers will reverse the trend. January and February are typically the weakest months for sales anyway so automakers are not fretting the dip in sales. They are optimistic that this economic downturn is unlike the last couple of downturns and they expect that overall sales will be higher for the entire year.

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Joel Stocksdale
Joel Stocksdale has more than a quarter century joined car industry and car news coverage encounter that he conveys to Green Auto Shop perusers. Over the thirteen years that he possessed a car business, he worked straightforwardly with each significant auto mark in the vehicle business and got comfortable with all makes and models of autos. His energy for autos drove him to put over the most recent twelve years in car news coverage where he conveys all that experience to his perusers as he expounds on the vehicle business and the most recent test autos he drives.