Summer Factory Incentives Outlook – Car Pro Commentary

summer factory incentivesAll indications are it will be a buyer’s market this summer, with some terrific factory incentives. As the auto industry continues to pick up momentum, the automakers spend a lot of time and resources, trying to gain more market share. Market share is the percentage of overall sales a company can grab, and it’s the biggest prize in the industry.
Industry experts are predicting total sales for the 2013 calendar year to be 15.1 million, the best year since 2007. Personally, I think the number will surpass 15.3 million, but either way, it’s a good year and getting pretty close to the 17 million the industry enjoyed from 2000 to 2007.
Automakers are like some animals, they smell blood when they have hot new products hitting the market, or they sense momentum on their side. It is a constant battle between the marketing/sales side, and the accounting side. In the end, the marketing/sales side wins.
Kia Motors America Executive Vice President for sales Tom Loveless agreed with me that industry sales would end around 15.3 million. “I think it will be a hard-fought 15.3 — I think it will be extremely competitive,” Loveless said at the same discussion. “I think we will have incentives higher than any of us would like them to be. I think we’ll have marketing expenditures higher than any of us would like them to be but in the end I think it will come down to value more than anything.”

I look for the full-sized truck incentives to be red hot. Chevy has their new Silverado hitting the ground in the next week or so, and that means the 2013 models have to go away before the dealers will order the 2014 in big numbers. Ford on the other hand knows they have to keep up with GM spending, or they will lose market share or put their 36-year streak of being the #1 selling vehicle in America, in jeopardy.
Gas prices could affect this too. If they suddenly spike, it will put pressure on the large SUV and heavy duty trucks, which will surely bring an incentive increase on those. If gas prices fall, we know fuel-efficient cars and hybrids will need a boost in incentives.
You will most likely NOT see lease incentives. That doesn’t mean they won’t be there, or that they won’t be substantial, they are just way harder to identify. This is especially true with the luxury brands. There is a battle going on with the luxury brands for supremacy, and leasing makes up a large portion of their business.
You will likely see financing options, perhaps extra money if you have a trade-in, extra rebates if you finance with them, and maybe even some loyalty money if you purchase a brand you already own.
Predicting incentives is difficult at best, even for me, who follows them literally on a daily basis. I can tell you that the moon and stars are aligning for this summer to be the best for consumer incentives in many years.


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