BMW, Audi, Mercedes help boost U.S. car sales with incentives
TOKYO (Bloomberg) -- BMW, Audi and Mercedes-Benz were among a number of carmakers offering generous discounts to U.S. auto buyers in August that helped drive sales to the best month in eight years.
BMW, the biggest spender among the three on a per-vehicle basis, boosted incentives by 45 percent from a year earlier, according to researcher Autodata Corp. Promotional spending surged 30 percent at Mercedes and 71 percent at Audi, pacing an 18 percent jump for the total industry, the researcher said. Spending by vehicle averaged $4,912 at BMW last month, followed by $4,189 for Mercedes and $3,236 for Audi.
Several mass-market automakers joined luxury brands in boosting discount offers. Incentive spending climbed 43 percent at Nissan Motor Corp., 24 percent at Chrysler and 23 percent at Ford Motor Co., Autodata said.
Chrysler was the biggest discounter among mass-market carmakers last month, with average spending of $3,856 per vehicle, followed by $3,595 at Ford and $3,587 at General Motors Co.
"Incentive spending changes reflect consumer demand shifting to higher-MSRP, higher-profit vehicle segments, which is a net positive for most full-line automakers," said John Krafcik, president of auto-buying website TrueCar Inc.
Rising average discounts
More aggressive incentive spending casts a shadow over an industry that is driving U.S. economic growth and entered the month having kept promotions in check. In the first seven months of the year, the industrywide average discount per vehicle had risen 5.5 percent.
"Between rising incentive spend, higher subprime lending, and longer loan terms, there is certainly cause for concern and reason to think the massive growth should eventually slow down," Akshay Anand, an analyst at auto market researcher Kelley Blue Book, wrote in an email.
Bigger incentive deals in the U.S. helped automakers report August deliveries that rose 6 percent to 1.58 million, pushing the seasonally adjusted annualized rate of sales to 17.5 million vehicles, the highest since January 2006.