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Nissan and Mitsubishi Offer Opinions On Incentives

July 17, 2003

The chief executives of Nissan Motor and Mitsubishi Motors criticized the US "Big Three" car makers on July 17 for leading a race to offer incentives to buyers, saying it was eroding profitability in the world's biggest car market, according to Reuters.

"The current situation in the US is crazy. Somebody is driving a brutal incentive race -- you read about $10,000, $6,000 discounts all over the place -- and how could that work? It's crazy," Mitsubishi Motors CEO and President Rolf Eckrodt said at the Economist Automotive Roundtable in Tokyo, according to Reuters. Eckrodt reportedly added: "And all participants in this race are losers."

Reuters said that, hurt by soft personal spending, Detroit's Big Three have been offering discounts in the form of rebates and interest-free loans so as to lift sales, at the expense of profits. While incentive levels at Japanese automakers are also rising somewhat, they are nowhere near the average $3,000-plus that the Big Three are dishing out, Reuters said, adding that, nevertheless, Japanese car makers are still enjoying a rise in market share.

According to the Reuters report, Mitsubishi’s Eckrodt added that as long as the "crazy" situation in the US market continued, Japanese car makers would continue to march ahead of their local rivals.

"Obviously, the (Japanese makers) do better," he reportedly said.

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