NEW YORK (CNN/Money) -
It used to be that the start of the new model year was when automakers could get top dollar for their shiny new cars. Not any more.
Lately, it's been common for many of the Big Three's new models to hit showrooms already equipped with big cash-back offers. Now, some Japanese and Korean automakers are joining the rebate fast track.
The Asian makes haven't taken the game as far as the Americans, yet. General Motors Corp., Ford Motor Co. and Chrysler Group have stepped up their new-model incentives, with more than 80 percent of Chevrolet and Dodge vehicles already offering cash back on 2004 models. That compares with just over 50 percent for the Asian brands most active in the incentive wars.
"They [Asian automakers] started offering some cash on '04s before they even hit the ground, especially for those that haven't changed the design much," said Joe Cashen, director of CarsDirect. "In years I've been doing this, I've never seen them offering this much cash this soon. Normally the offers came after the cars had been on [dealer] lots for several months."
Honda Motor Co. remains the one major Asian automaker not offering any cash-back deals.
One reason Asian automakers still lag the traditional Big Three on new model incentives is that their offers are much more targeted by region. The difference can be as much as $750 on the same model between one part of the United States and another, Cashen said.
For example, Cashen said, while $500 cash back is available on the 2004 Camry in the New York region, in the San Francisco area buyers can get only a reduced-rate financing package. The Toyota Tundra pickup has up to $1,000 cash back available in the Southeast and Gulf states, where competition among pickups is greatest, and only about $500 elsewhere.
Data from Power Information Network, an affiliate of J.D. Power, shows that Toyota, the No. 4 automaker in terms of U.S. sales, had incentives on 12.2 percent of its 2004 models in September. That's up from only 7.6 percent of 2003 models in September last year. Toyota spokesman Xavier Dominicis said the largest Japanese automaker still is less active in the 2004 model incentives than most competitors.
"We have to maintain some competitiveness in the marketplace," he said. "As the marketplace experiences a general uptick in incentives, you'll see Toyota moving in that direction, but not at the high levels that others have taken."
No. 1 Korean automaker Hyundai as well as Nissan, the No. 3 Japanese automaker in terms of U.S. sales, and No. 4 Mitsubishi, are the Asian automakers with the largest increases in new model incentives.
Hyundai offered an average $909 on 51 percent of its 2004s sold last month. It didn't offer any cash-back deals on 2003 models a year ago.
* Incentives vary by reqion. Other incentives may be available. | Source: Edmunds.com |
|
Mitsubishi is offering an average of $1,949 per vehicle on 52.3 percent of its 2004 vehicles, according to PIN data, compared with an average of $823 cash back on 11.5 percent of its 2003s in September 2002. (DaimlerChrysler owns a controlling share in Mitsubishi.)
Nissan is offering an average of $1,427 cash back on 22 of its new models after offering no cash back on its 2003s when they hit showrooms a year ago. Analysts say the trend of offering more incentives right out of the box isn't going to be reversed any time soon.
"I think incentives are very much an integral part of the industry," PIN's Tom Libby said. "It's a very sophisticated pricing tool. The Asians are clearly much more into the incentives game this year."
|