May 26, 2009

Manufacturer Incentives Limited Influence on New-Car Buyers

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BANDON, Ore. — Automaker incentives had minimal effect on new-car buyer purchases in April, reported CNW Market Research in its May newsletter.

The Bandon, Ore.-based research firm found that 57 percent of new-car buyers said incentives didn’t change their purchase plans at all. Among the other 43 percent, however, incentives either caused earlier purchases (14 percent), entry into the market in general where no intentions to buy a new vehicle existed (2.8 percent) or resulted in a shopper switching brands (25.2 percent).

“While most incentive dollars are wasted because it has little if any impact on newcar shoppers, the fact remains if one car company does it, competitors have no choice but to join in,” wrote CNW’s Art Spinella. “The 25 percent who switch brands based on incentives can mean the difference between a market share gain or loss.”

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