Rebates and other sales incentives for new cars and trucks rose again in May, but apparently gave little help to U.S. automakers trying to hold their ground against foreign models, according to Reuters.
According to analyst reports released June 8, the average incentive for new cars from Detroit's Big Three rose to $2,288 in May, up 14.8 percent from the same month a year ago and up about $100 over April. Asian automakers raised incentives by 3.6 percent, to an average of $1,308, while European automakers pushed incentives up 17.7 percent to $1,386.
Automakers have been raising incentives for months to bolster auto sales, which have been running strong despite a sluggish U.S. economy, higher unemployment and consumer uncertainty. They've also been branching out from cash rebates into cheap loans -- some with no interest -- and creative deals such as General Motors Corp.'s offer to cut leases short if lessees would buy a new vehicle.
According to analysts, Toyota Motor Corp. and Honda Motor Co. Ltd. were the only automakers whose sales outpaced growth in incentives in May. The worst performer was Ford Motor Co., whose incentives rose 27 percent while sales fell 11.6 percent.
The Chrysler side of DaimlerChrysler AG is in a similar position to Ford, with the highest incentives in the industry at nearly $2,500 per vehicle, up 18 percent over a year ago, and sales down 8 percent in May.
GM has not raised its incentives as quickly as the other two, but is still offering an average of $2,302 per vehicle. Its sales were flat in May, as new incentives on pickups boosted demand.
In past years, automakers hiked rebates in summer but pulled back once the new model year began in autumn. That pattern appears to have been broken, and there is no sign that the rebate battles will ease anytime soon, according to analysts.
