The Truth About Cars » Incentives The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Apr 2014 16:58:35 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Incentives New PSA Boss Tavares Prepares To Rebuild Company Mon, 14 Apr 2014 14:15:58 +0000 Carlos Tavares

Though PSA Peugeot Citroen secured funding in a three-way deal between itself, the French government and Dongfeng, new boss and former Renault COO Carlos Tavares has a hard road ahead of him as he rebuilds the ailing automaker.

Reuters reports Tavares will focus using the joint venture it shares with Dongfeng to go after 1.5 million sales by 2020, bring exports to Southeast Asia and establish a research center. He will also tighten up both working capital and the number of models sold in each market, as well as squeeze savings from PSA’s suppliers.

However, development woes, pricing issues on some models, and the use of heavy discounts and incentives are all roadblocks on Tavares’ “Back in the Race” plan expected to be issued in full Monday, as well as currency challenges in Latin America and Russia and lower-cost products from around Asia.

As part of the plan, Tavares is expected to halve the number of models it currently offers. On the bright side, the 308 and 2008 both delivered a combined 5.2 percent sales increase in the first two months of 2014, as well as an 8.5 percent Q1 2014 gain over PSA’s home market.

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Chevrolet Offers Incentives, Extends Truck Month To Take Back Sales Crown Mon, 07 Apr 2014 13:02:44 +0000 2014-Chevy-Silverado _12_

Though Ram knocked Chevrolet off the monthly sales throne for the first time since August 1999, the brand is ready to reclaim their part of Truck Mountain by offering incentives and extending their annual Truck Month into April.

Automotive News reports brand vice president Brian Sweeney threw down an additional $1,000 on the hoods of 2014 Silverado double-cabs in pursuit of “the heart of the pickup market.” Furthermore, Chevy’s second Truck Month boosts incentives offered last month, dropping a maximum discount of $8,974 into the bed of the Silverado 2500 HD crew cab or $8,162 for the light-duty double cab V8 model.

Lease offerings were also boosted for the reclamation battle, as one email from a Northeastern United States gave details for a regional lease agreement of $269 per month with $1,900 due upon signature; the Ram’s terms were $259 per month, but with a higher down payment of $2,999 upon signature.

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Leaked Documents Link Anti-Union VW Incentive Offer To TN Governor’s Office Wed, 02 Apr 2014 14:15:09 +0000 092112_WEB_a_VW_Sign_t618

Leaked documents linked to the United Auto Workers battle for the Volkswagen plant in Chattanooga, Tenn. point to a connection between Governor Bill Haslam and the German automaker regarding a $300 million incentive in exchange for over 1,300 jobs at a proposed SUV plant within the state.

WTVF-TV reports the incentives were contingent “to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee.” By the time Volkswagen entered into election talks with the UAW in January, however, the Haslam administration formally notified the automaker that it was withdrawing the offer, citing that it had kept the offer on the table past the 90-day window normally reserved for incentives when the incentive in question had no such expiration date.

Though Haslam has denied any such connection to the incentive — dubbed “Project Trinity” — U.S. Senator Bob Corker claimed as early as February of this year that the offering would be made should the workers at the Chattanooga plant vote against representation by the union.

As for the UAW, organizer Gary Casteel stated the following in response to whether the now-public documents were a game-changer in the union’s appeal to the National Labor Relations Board over the election results:

To me, it puts pressure on the state to do what they should have done in the first place — and that’s give the incentives with no strings attached, just like they would any other company, union or non-union.

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Barclays: GM Suffering From Worst Large Pickup Launch In 15 Years Fri, 28 Feb 2014 15:29:25 +0000 2014 Chevrolet Silverado 1500 Exterior

Though the 2014 Chevrolet Silverado took home North American Truck/Utility of the Year at last month’s Detroit Auto Show, the large pickup and its brother, the GMC Sierra, have suffered from “the least successful large pickup launch over the last 15 years” according to Barclays Capital analyst Brian Johnson.

Automotive News reports the truck twins “faced a full-court press” from the Ford F-150 and Ram 1500, though winter weather also played a role in lower sales across the board. General Motors executives have come to the defense of their products, proclaiming average transaction prices of $4,000 to $5,000 more than the previous generation pickups and a combined market share hovering around 33 percent over the past few months, though the latter point held between 35 and 40 percent of the market in years past.

With dealers begging for stronger promotion and better incentives for the pickups, Chevrolet will host its Chevy Truck Month promotion. The month-long sale will offer supplier pricing (dealer invoice plus destination charges and a $150 fee) on light- and heavy-duty Silverados, and will be heavily pushed during the NCAA Men’s Basketball Tournament with television advertising beginning March 18.

In addition, Chevrolet, Buick and GMC will all hold Open House events throughout the month of March. The month-long sale will offer supplier pricing on nearly every 2014 vehicle sold under each brand, with the exception of the SS and Corvette Stingray for Chevrolet.

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Presidents Day, Warmer Weather Provide Small Jump In February Sales Wed, 26 Feb 2014 11:00:08 +0000 Mazda-Dealership

Brief warming spells between polar vortices and Presidents Day sales boosted sales in February, though rising inventories and incentives raise questions about sales momentum heading into the oncoming spring selling season.

Automotive News reports seasonally adjusted annualized rates of 15.4 million units from TrueCar and, and 15.3 million from Kelley Blue Book, up from 15.2 million SAAR projected last month after snowstorms and colder temperatures across most of the country kept consumers out of the showroom.

Meanwhile, fleet sales also took a hit this month, contributing to overall SAAR projections of 15.5 million from Barclays Capital, 15.7 million from LMC Automotive, and 15 million-plus from Wells Fargo Securities. Wells Fargo Securities senior analyst Richard Kwas also estimates March’s SAAR could surpass 16 million units, a figure last seen in August and November 2013, while he and J.D. Power senior vice president of the global automotive practice John Humphrey both believe the negative effects bestowed by winter weather systems earlier in February would be mitigated by stronger push in sales — boosted by Presidents Day promotions — at the close of the month.

Part of that push comes at the heels of more incentives. TrueCar listed increases of 3 percent over January, 5 percent from the same point in 2013, and a year-over-year of 20 percent for Honda, Hyundai/Kia, Toyota and Volkswagen. Ford also boosted their year-over-year to 16 percent, while General Motors and FCA’s Chrysler Group saw their incentive spending fall. Transaction prices also rose this month, with LMC predicting a record average of $29,000 per unit, beating the previous record from last February by over $400 per vehicle.

At the start of February, automakers began with an 88-day supply of inventory, the highest since 2009 when automotive sales collapsed at the start of the Great Recession. LMC expects the inventory should thin by spring — projecting a 16.2 million SAAR for 2014 — though warned production levels could drop if the backlog is still an issue come June, forecasting a 2.5 percent decline in North American production to 16.5 million units.

Even more interesting will be the month of March. It could be the first indicator of over-exuberance about the auto market, or it could be the sign of things picking up after a nasty bout of cold weather.

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Ford Raises Incentives To Clear Growing Fusion Inventories Tue, 25 Feb 2014 11:00:34 +0000 fusion

As inventories of Ford’s Fusion continue to outpace demand — the result of a second plant brought online last year to keep up with demand for the newly redesigned midsize sedan — the automaker has been raising incentives to move more Fusions out of the lot.

Automotive News reports most dealers around the United States are offering potential Fusion owners zero-percent financing for 60 months plus $1,000 cash back, with discounts up to $3,000 available for trade-ins to those who decline the financing; lessees receive no money due at signing with no payment for the first month of the lease.

The incentives — the most generous offered since the Fusion’s new look debuted in 2012 — come as inventories of the midsize sedan climbed to 97 days as of February 1 — up from 84 days in January — while sales of midsize cars overall have declined from a peak of 200,000 since August of last year, with winter weather holding back more sales.

Though Ford is spending $2,900 in incentives on every Fusion — Toyota’s Camry and Nissan’s Altima both hold higher incentives — the automaker’s chief analyst, Erich Merkle, says the car still commands the highest transaction price in the segment, and is confident inventories will thin as winter gives way to spring:

The midsize sedan segment is the most competitive segment in the industry right now. The good thing is average transaction prices are still very healthy.


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Tennessee Lawmakers Threatening To Kill Subsidies If UAW Wins VW Plant Tue, 11 Feb 2014 16:40:30 +0000 092112_WEB_a_VW_Sign_t618

Should the United Auto Workers win the upcoming election to represent workers at Volkswagen’s Chatanooga, Tenn. plant, the automaker may find itself shunned by state lawmakers as far as further subsidies are concerned.

Volkswagen is seeking a new site this year to build their CrossBlue-based mid-size SUV in 2016, wooing both powers that be in Tennessee and Mexico for subsidies. However, Republicans in the Tennessee state legislature are threatening to back down on $580 million in state and local incentives the government offered to the automaker in 2008.

Tennessee House Majority Leader Gerald McCormick and state senator Bo Watson both said VW would have “a very tough time” attracting anymore tax dollars from the coffers should the UAW win representation, and while they were happy to have the automaker in their backyard, it didn’t mean they were ever given a “green light” to force unionization into the plant. They also criticized VW for giving union supporters an unfair advantage against anti-unionization lobbyists, a charge the automaker denied in a statement supporting the workers’ right to be approached by union supporters and opponents prior to the upcoming election.

Furthermore, VW also stated they would have recognized the UAW through a card check in lieu of an election, but insisted on the workers voting for representation to reflect the automaker’s belief that “democracy is an American ideal,” according to vice president of human resources Sebastian Patta.

Meanwhile, a spokesman for Governor Bill Haslam warned that the legislature would play a huge role in approving incentives to help fund the project — being too large for the state’s FastTrack incentive program as it is — and that the impact of UAW representation would affect the state’s ability to recruit other companies to the state.

Longtime UAW critic United States Senator Bob Corker originally remained mum on the upcoming vote, but after the union’s regional director Gary Casteel offered his praise of Corker’s statement by prompting other politicians to do the same in respect of the upcoming vote, the former mayor of Chattanooga felt the union was attempting to stifle other voices from commenting on the issue before stating that he would “return home [to] ensure [his] position was clear”: that the UAW would make VW “the laughingstock” of the automotive industry. Casteel fired back, calling Sen. Corker a flip-flopper prone to being swayed by special interests before restating his belief that UAW representation at the plant would improve the quality of life for both workers in the VW plant and everyone in Chattanooga.

Other critics weighed in on the election, such as the group called Southern Momentum, who quoted a factory worker leading the anti-unionization coalition at the plant as saying, “A vote for the UAW is a vote against the expansion of the plant, plain and simple.”

The election will take place from Wednesday to Friday of this week under supervision by the National Labor Relations Board. Around 1,500 workers will be eligible to vote during the three-day period.

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Domestic Automakers’ Inventories Soar Past 100 Days’ Supply Tue, 11 Feb 2014 11:00:26 +0000 ku-xlarge (1)

Inventories of unsold cars and light trucks have swollen to their highest levels since the recession while sales growth in the U.S. market has slowed significantly in the past five months. That combination could mean larger discounts and incentives and lower profit margins in 2014. According to Automotive News, all three domestic automakers started February with more than a 100-day supply of unsold vehicles. Industry-wide automakers had 88 days’ worth of vehicles at the start of February, the highest February inventories have been since 2009, when the industry was at its nadir.

As a portent of things to come, on Friday GM began a nearly month long Presidents Day promotion on Chevrolet, Buick and GMC vehicles, with some of GM’s biggest incentive offers in months.

In January, sales declined 3 percent and the seasonally adjusted annualized selling rate fell to 15.2 million, the lowest since April. Much of that decline was attributed by automakers to the severe winter weather that blanketed much of the country. Analyst, though, say that there are other factors besides the weather.

Morgan Stanley analyst Adam Jonas said that after four years of growth, the sales pace “appears to have stalled.”

“The industry stands at a crossroads,” Jonas told AN. “We really think the best of the U.S. auto replacement cycle is over. The incremental buyer is moving from someone who needs to replace their car to one who just wants to, making financial willingness to lend and credit availability more important than ever.”

Car companies are minimizing the impact of rising inventories and so far most are not giving in to increasing incentives.

GM’s inventory grew by about 32,000 units in January in a month that saw sales fall 12% from the previous year. That resulted in a 114-day supply of vehicles as of Feb. 1, the highest among major automakers, up significantly from 81 days a month earlier.

Ford Motor’s Feb. 1 supply was up to 107 days, after starting the year at 73 days, and Chrysler Group had a 105-day supply, up from 79 days. Chrysler’s inventory situation was helped by strong sales of the new Jeep Cherokee.



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Early ELR Adopters Receive Free Charging Stations Wed, 29 Jan 2014 18:00:56 +0000 2014 Cadillac ELR

If you should become one of the early adopters who purchase a Cadillac ELR soon, the brand has announced that they will throw in a free charging station as a gift for paying $75,000 over the next 36 to 72 months for the luxury plug-in hybrid.

Normally, the 240-volt charging station would be installed at an owner’s home starting at $1,000, with financing available for installations between $1,000 and $3,499 spread over 24 months at 0 percent and $0 down, and 2.99 percent over 84 months with $0 down for installations above $3,500. The price range is determined after Bosch Certified Contractors look over factors affecting installation, including age of the home, location of installation, permits et al.

On top of the incentive, ELR owners will also acquire the services of their own ELR Concierge Representative, who will help their owner with information on battery care, home charging, service scheduling and other concerns regarding their purchase.

No word on when Cadillac will cease offering free stations, though the $699/month lease incentive for well-qualified consumers currently on offer will end on January 31 of this year.

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Bright Future For Auto Lending in 2014 Fri, 20 Dec 2013 15:19:29 +0000 Dealer Customer Stock Photo

According to credit reporting bureau TransUnion, auto finance has a bright future ahead in 2014, with easier access to credit and bigger loans for consumers.

The company expects the average debt load per auto consumer will be $17,996 by the fourth quarter of 2014, up $1,000 from Q4 2013. TransUnion’s Vice President of Automotive Peter Turek says this is good news for all involved, as high demand for vehicles will lead to more loans and incentives as both lenders and dealers compete for consumers.

Of course, one downside to this new gold rush comes from subprime lending and the delinquencies they tend to spawn in their wake, though Turek believes they will remain at levels far below those found at the start of the Great Recession in 2008 in part due to strong used-car prices. TransUnion notes that 29.8 percent of all loans in Q3 2013 are subprime, nearly five percent lower than in Q3 2008 when the bottom fell out.

Leasing will also have it good in 2014, though TransUnion was mum on how good beyond stating it would be better than 2013, where 1.3 million leases were signed in the first half of the outgoing year. Turek says that, much like strong used-car prices, leasing will also offset delinquency rates, as financing for leases are made upon new cars for consumers with above-average credit ratings.

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November U.S. Car & Truck Sales Up 9% Overall, Led By GM & Chrysler Tue, 03 Dec 2013 22:41:06 +0000 Automaker Nov. 2013 Nov. 2012 Pct. chng. 11 month
2013 11 month
2012 Pct. chng. BMW Group 36,411 36,540 0% 332,725 304,597 9%     BMW division 31,752 31,213 2% 271,891 244,061 11%     Mini 4,575 5,248 –13% 59,910 59,667 0%     Rolls-Royce 84 79 6% 924 869 6% BMW Group 36,411 36,540 0% 332,725 304,597 9% Chrysler Group 142,275 122,565 16% 1,639,361 1,499,420 9%     Chrysler Division 21,024 18,766 12% 282,222 282,454 0%     Dodge 41,506 40,075 4% 548,654 472,598 16%     Dodge/Ram 72,761 65,149 12% 880,469 742,641 19%     Fiat 3,075 3,603 –15% 39,491 40,065 –1%     Jeep 45,415 35,047 30% 437,179 434,260 1%     Ram 31,255 25,074 25% 331,815 270,043 23% Chrysler Group 142,275 122,565 16% 1,639,361 1,499,420 9% Daimler AG 37,345 32,658 14% 306,898 273,694 12%     Maybach – 5 –100% – 45 –100%     Mercedes-Benz 36,386 31,949 14% 298,489 264,636 13%     Smart USA 959 704 36% 8,409 9,013 –7% Daimler AG 37,345 32,658 14% 306,898 273,694 12% Ford Motor Co. 189,705 177,092 7% 2,268,644 2,030,107 12%     Ford division 182,978 171,360 7% 2,194,934 1,955,341 12%     Lincoln 6,727 5,732 17% 73,710 74,766 –1% Ford Motor Co. 189,705 177,092 7% 2,268,644 2,030,107 12% General Motors 212,060 186,505 14% 2,555,921 2,349,984 9%     Buick 15,072 13,289 13% 190,130 163,935 16%     Cadillac 16,172 14,517 11% 164,378 131,534 25%     Chevrolet 145,089 128,867 13% 1,793,632 1,684,555 7%     GMC 35,727 29,832 20% 407,781 369,960 10% General Motors 212,060 186,505 14% 2,555,921 2,349,984 9% Honda (American) 116,507 116,580 0% 1,390,057 1,290,011 8%     Acura 14,559 12,246 19% 149,685 140,182 7%     Honda Division 101,948 104,334 –2% 1,240,372 1,149,829 8% Honda (American) 116,507 116,580 0% 1,390,057 1,290,011 8% Hyundai Group 101,416 94,542 7% 1,159,326 1,161,993 0%     Hyundai division 56,005 53,487 5% 657,778 643,572 2%     Kia 45,411 41,055 11% 501,548 518,421 –3% Hyundai Group 101,416 94,542 7% 1,159,326 1,161,993 0% Jaguar Land Rover 6,047 4,400 37% 59,654 49,452 21%     Jaguar 1,446 713 103% 15,408 10,962 41%     Land Rover 4,601 3,687 25% 44,246 38,490 15% Jaguar Land Rover 6,047 4,400 37% 59,654 49,452 21% Maserati 887 208 326% 3,715 2,397 55% Maserati 887 208 326% 3,715 2,397 55% Mazda 20,754 21,691 –4% 260,983 249,793 5% Mazda 20,754 21,691 –4% 260,983 249,793 5% Mitsubishi 6,071 3,574 70% 55,804 53,677 4% Mitsubishi 6,071 3,574 70% 55,804 53,677 4% Nissan 106,528 96,197 11% 1,138,662 1,042,366 9%     Infiniti 13,152 11,897 11% 103,223 107,250 –4%     Nissan Division 93,376 84,300 11% 1,035,439 935,116 11% Nissan 106,528 96,197 11% 1,138,662 1,042,366 9% Subaru 36,621 28,206 30% 384,511 299,788 28% Subaru 36,621 28,206 30% 384,511 299,788 28% Suzuki* – 2,224 –100% 5,946 23,412 –75% Suzuki* – 2,224 –100% 5,946 23,412 –75% Toyota 178,044 161,695 10% 2,045,199 1,888,361 8%     Lexus 25,611 22,719 13% 239,090 213,559 12%     Scion 4,968 5,606 –11% 63,998 67,983 –6%     Toyota division 147,465 133,370 11% 1,742,111 1,606,819 8%     Toyota/Scion 152,433 138,976 10% 1,806,109 1,674,802 8% Toyota 178,044 161,695 10% 2,045,199 1,888,361 8% Volkswagen 48,695 52,916 –8% 556,839 553,242 1%     Audi 13,636 12,067 13% 141,048 124,469 13%     Bentley 320 212 51% 2,519 2,078 21%     Lamborghini* 46 44 5% 506 476 6%     Porsche 3,966 3,865 3% 39,077 32,091 22%     VW division 30,727 36,728 –16% 373,689 394,128 –5% Volkswagen 48,695 52,916 –8% 556,839 553,242 1% Volvo Cars NA 4,233 6,141 –31% 56,345 61,967 –9% Volvo Cars NA 4,233 6,141 –31% 56,345 61,967 –9% Other*** 253 246 3% 2,783 2,702 3% TOTAL 1,243,852 1,143,981 9% 14,223,373 13,136,963 8%

Sales of cars and light truck in the United States went up 9% overall to 1.24 million units delivered in November, selling at the fastest clip in almost seven years. The SAAR rose to 16.4 million units, exceeding analyst predictions of about 15.8 million vehicles. That’s the best seasonally adjusted annual rate since Feb. 2007, before the start of the global recession. November sales were the best since 2003 and close to the best November ever.

General Motors and the Chrysler Group’s sales were up more than the industry average, at +14% and +16% respectively with pickups and the new Jeep Cherokee spurring the increases. The new Cherokee sold over 10,000 units in the first full month that it has been available since a somewhat botched launch. Toyota and Nissan were also up by double digits, 10% and 11%, while Honda sales were more or less flat, down 0.1% from last November’s record sales. Ford was up 7% and announced that it was scaling back production in its North American plants in the first quarter of 2014, making about 2% fewer cars than the same period in 2013. Subaru continued to do very well, with sales up 30% over last year. Volkswagen, though, went against industry trends and was down 8%.

Lincoln had its second straight month of double digit increases, up 17% from November 2012.

Chrysler Group sales did well despite the fact that Fiat deliveries were down 15% and car sales at Chrysler and Dodge were down 7%, offset by a 26% increase in demand for light trucks.

Hyundai set a November record with 56,005 units delivered, up 5% from last year, led by the Santa Fe, Accent, and Elantra.

Jaguar Land Rover continues to do well with group sales up 37%. Land Rover set a November record at 4,601 on strong sales of the Evoque and redesigned Range Rover flagship and now that the F Type is at dealers, Jaguar posted an increase of over 100% to 1,446 unites.

VW’s CEO for America, Jonathan Browning said that the brand will not follow other companies aggressive incentives, one reason for a 16% decline in VW brand sales, with the Jetta, Passat and Tiguan all doing worse than last year. At VW’s Audi brand the news was better, up 13% on strong demand for crossovers.

Analysts say the industry’s overall numbers were helped by five weekends in the sales period along with early holiday promotions, attractive financing offers and pent-up demand. Sales went up at the end of the month as automakers and dealers had Black Friday sales events.

Incentives were up slightly from last year, but down 2% from last month to an average of $2,507 per vehicle.

Average transaction prices were down $198/vehicle from last year to $30,634, the first year to year decline in ATP in almost 3 years, though GM, Toyota and Chrysler reported record ATPs in November.

Table courtesy Automotive News

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Never Say Never: Hydrogen, Diesel En Vogue Again Mon, 18 Nov 2013 14:44:19 +0000 Honda FCX Clarity

Remember this piece from the Honda Summer 2008 Hydrogen Collection? It was supposed to point the way to future of green fuel technology before the Tesla brought plug-in sex appeal down the ramp with their Roadster and, later on, the S, as well as the trend of compliance EVs from Chevrolet, Volkswagen and Kia.

But with sales of plug-in hybrids advancing far slower than originally expected regulators are taking another look at alternative ZEV powertrains.

Back in 2009, U.S. President Barack Obama set a goal for 1 million EVs on the road by 2015, going so far as to place a $5 billion bet on Tesla and Fisker among other automakers. Since then, only 95,000 units have managed to leave the showroom for the open road, with sales of over 500,000 predicted for 2015 by West Bloomfield, Mich.-based Baum & Associates analyst Alan Baum. With the current administration downplaying their role in the EV market, President Obama is awarding $4 million to aid in the development of fuel cell technology and storage for hydrogen-powered vehicles.

Leading the charge toward the hydrogen future is California. Aside from passing a measure to provide 100 hydrogen fueling stations as part of their clean technology vision, the state’s legislature has fine-tuned the Zero-Emission Credit formula to better benefit hydrogen vehicle producers — such as Honda and General Motors, who announced a partnership to develop their respective technologies back in July — while drawing down power from Tesla to as much as 40 percent by 2015 for each S sold.

Back in D.C., Audi is putting the pressure on the Environmental Protection Agency to change their mileage formula for the showroom window sticker, and to level the playing field in taxation between diesel and gasoline. The reasoning, according to Audi of American president Scott Keogh, is that the current formula favors gasoline power on the assumption that most driving is done in the city; diesel it at its most efficient on the highway, and is one-third more efficient than gasoline in otherwise equal conveyances according to the U.S. Department of Energy. The diesels used today are cleaner as a result of the advent of ultra-low sulfur fuel and tailpipe exhaust treatment.

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Hyundai Slashes Sonata Production & Incentives Mon, 18 Nov 2013 13:30:52 +0000 Hyundai production line Alabama plant

The Hyundai Sonata is the oldest car in its segment and a new model is expected next year. Normally, when a car is about to be replaced by the next generation of that model, automakers usually start increasing incentives to move the metal. Sonata sales are down 11% from last year. Now, Hyundai has slashed production of its midsize car, allowing it to reduce incentives to the second lowest in the segment. Average incentive spending on the Sonata is down to ~$2,200. Only Honda’s Accord, with about $840 in incentives available is discounted less.
Production of the car is also down 11% through October. That has freed up capacity for the Elantra compact, whose sales are up 21% year to date. Both cars are assembled for the U.S. market in an Alabama factory.

An all-new Sonata is expected to be introduced next April at the New York Auto Show. The current model has been on sale since 2011.

Hyundai currently has a 42 day supply of the Sonata compared to the the segment average of 76 days.


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Production of 2014 Chevy Volts Begins, Along With a $5,000 Price Cut Tue, 06 Aug 2013 16:06:11 +0000 voltparade_r

General Motors announced that the 2014 edition of the Chevy Volt will start rolling off the assembly line at GM’s Detroit-Hamtramck assembly plant today. They also announced that when those new Volts arrive at dealers in a few weeks they’ll be $5,000 cheaper than the 2013 model. The move is in response to price cuts and lease deals on competitors’ EVs. After Nissan cut the price of the Leaf by $6,400 in January, its sales are up 300% from last year for the first half of 2013, just barely outselling the Volt. In July, Ford lowered the price of the Focus Electric by $4,000 and the recently launched Fiat 500e and Chevrolet Spark EV are offering $199/month leases.

The base MSRP on the 2014 Volt’s Monroney label will read $34,995, plus $810 to get it from the factory to the dealer. After applying the $7,500 federal tax credit, that puts the effective price of the Volt at $27,495, about what a nicely equipped Chevy Cruze would cost. One of the criticisms of the Volt has been that it’s expensive compared to the Cruze, with which the Volt shares a platform.

So far this year, Volt sales are up 9% to 11,463.

GM said that it has made “great strides” in reducing the manufacturing cost of the Volt, though no dollar figures were released. GM execs have said that the 2nd generation Volt, scheduled to go on sale in 2015, will cost them between $5,000 and $10,000 a unit less to build than the current model.

Apparently one reason for the current price cut is how people now use the internet to shop for cars. The lower MSRP is expected help the Volt show up in consumers’ search results. “Before, if you were going to price-shop a hybrid or a plug-in, the Volt didn’t even show up because of price point,” GM spokeswoman Michelle Malcho said.

Though the recent price cuts have raised the sale of EVs and PEVs, they’re still a small fraction of the market. Total U.S. sales of EVs and plug-in hybrids were 41,447 units for the first six months of the year. Chrysler sold more Darts that that figure, and the Dart isn’t exactly moving up the sales charts in its segment.

Chevy dealers were already discounting the Volts they had in stock and GM itself is offering rebates of $4,000 on 2013 Volts and $5,000 on the 2012 models still in stock, so the price cut is not going to have much of a real world effect on transaction prices. reports that the average transaction price on the Volts that were s0ld was $38,578, with a total average incentive per car at $10,489. The dealer part of those incentives are essentially subsidized by a GM bonus program for dealers who hit company determined sales objectives.


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Mid-Size Sedan Sales War: Toyota Wants To Retain Camry Lead By Any Means Necessary Mon, 01 Jul 2013 17:13:37 +0000 Malcolm X by any means necessary


This year’s sales race in the mid-size segment is one of the most competitive in recent memory. 5 of the top 10 best-selling cars in America are mid-sizers, and automakers are pulling out all the stops in an effort to unseat the Toyota Camry from its standing as America’s best-selling car. But Toyota isn’t going down without a fight.

Sales figures as of May show the Camry in a decent lead over the #2 Honda Accord, ahead by nearly 16,000 units. But the Camry, which is down by 5.5 percent year-to-date, and incentive spending is nearly double that of the Accord, according to figures from TrueCar compiled by Automotive News.

At $2,750 per unit, Camry incentives are up by 38 percent, while the Accord’s $1400 incentive is down by 40 percent. The new model changeover explains the big drop in Accord spending, but the Camry’s incentives (like  0 percent financing for 60 months) is part of a broader plan that includes a big fleet sales program (current making up 20 percent of sales, and expected to level off to 15 percent, versus the Accord’s 1 percent figure) to help move metal. Toyota is gunning for 400,000 units in 2013 if necessary, a figure that may be hard to match production wise for other auto makers. Then again, one has to wonder how profitable the Camry will end up being when there’s such a relentless drive for volume at all costs.

Other challengers, like the Nissan Altima, Ford Fusion, Chevrolet Malibu and Hyundai Sonata, seem to be relying on high fleet sales, heavy incentives or a combination of both, to keep their numbers up. The Fusion’s numbers are particularly interesting. Despite sales being up nearly 22 percent year-to-date and Ford making noise about capacity issues, fleet numbers and incentive spending remains relatively high. Ford is spending about $2,300 per car, while fleet mix runs at 34 percent.

Even the Chevrolet Malibu, regarded as the dog of the segment, has a 39 percent fleet mix, despite conventional wisdom holding that GM is merely dumping these cars on daily rental fleets as a means of moving them off the lot. Still, Malibu sales are down 18.9 percent so far, and it will be interesting to see how things progress as sales of the refreshed model loom ever closer.

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GM Shells Out Cash “to stay in the electric vehicle game.” Mon, 10 Jun 2013 19:59:28 +0000

GM is sitting on 4.5 months of slow-moving Volt inventory, says the Detroit News. To make matters worse, production on the 2014 model is about to start. To make a dent into the 140 days of Volt supply, what do you think GM will do?

You guessed it, they don’t call you the Best & Brightest for nothing. GM offers $5,000 off 2012 Volts (yep, there still are a few sitting around) and $4,000 off 2013 Volts, Chevrolet spokeswoman Michelle Malcho told the Detroit paper.

Alternatively, the Volt can be leased for $269 a month for 36 months, with $2,399 due at signing, or bought with zero percent financing for 48 months, and receive $3,000 in cash off the price.

The DetN was told that “GM has increased its incentives to stay in the electric vehicle game.”

Volt sales were up 1.4 percent to 7,157 vehicles through May. Volt sales have fallen for the past three months.

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Bloomberg Buries The Lede: Cadillac Puff Piece Can’t Hide ATS Incentive Spending, Lagging Sales Tue, 09 Apr 2013 14:59:11 +0000

TTAC readers looking for a more pro-GM news source may want to check out Bloomberg for their next dose of pro-GM news. A story on Cadillac’s revived fortunes contains all kinds of enthusiastic copy and positive quotes, but still manages to bury the lede way down at the bottom of the story.

Take this quote for example

“Cadillac’s performance certainly exceeded expectations, and the ATS was the driving factor,” said Jeff Schuster, auto analyst with LMC Automotive in Troy, Michigan. “They have a lot happening with their lineup and the vehicles are hitting with consumers.”

Joel Ewanick himself couldn’t have come up with a better quote to feed to the industry price. The ATS is a nice car by all accounts. First drive impressions were positive, despite one of the buff books binning one into the red Georgia clay. But scroll a little further down past the ongoing textual fellatio and you’ll find the golden nugget.

Cadillac’s pricing problems show up in the incentives it offers. GM’s average incentive spending on the ATS in February was $3,700 per car, compared to $333 in September, when the new model went on sale, according to TrueCar Inc., a Santa Monica, California, researcher that tracks auto sales.

Uh oh. $3,700 just months after their crucial entry-level car was introduced? A nearly tenfold increase in incentive spending in just a few short months? Not good news at all. The incentives do explain why the ATS had a nice bump in sales right around February. It’s unfortunate that GM would have to spend so much per car to move a product as nice as the ATS.

Of course, Bloomberg handily explains away the unpleasant incentive information with this quote

Those discounts should decline as Cadillac’s redesigned models attract new buyers. GM said more than half the ATS buyers are coming from competitors such as BMW, Mercedes and Lexus. GM aims to increase sales of Cadillac in the U.S. by more than 30 percent this year, Bob Ferguson, global head of the brand, told reporters in New York last week. 

A look at incentive programs in the Miami/South Florida region (using ZIP Code 33180) as a sample shows that the ATS offering more aggressive incentive programs than its competitors. BMW is offering 3.1 percent APR financing for the new 3-Series (save for the Hybrid at 1.9 percent) versus 0 percent for the ATS. Audi offers no finance incentives for the A4 at all. While the ATS gets a $299/month lease for 36 months with $2,199 due at signing, a similarly equipped 328i would cost $349/month for 36 months with $3,824 due at signing. An A4 2.0T can be leased for $309/month for the same term with $3,719 due. Mercedes-Benz was not offering 36 month lease deals at the time of writing. Only Lexus came close to matching Cadillac’s offer, with a lease on an IS250 involving $309/month payment for 36 months, with $3,209 due at signing and a credit for the first month’s lease payment – on a model that is due to be replaced any day now, where dealers are desperate to get rid of the stock.

The incentive picture makes the Q1 2013 sales snapshot above even starker. The 3-Series and C-Class are way out in front. The C-Class is leading the segment with 22,912 units sold, with the 3-Series in second place with 20,662 units. Cadillac is in third place, but is beating the A4 by just 45 units as of the end of March (9795 units of the ATS sold versus 9750 A4s). The Lexus trails in fifth place with 5173.

The unfortunate thing here is that the ATS itself isn’t necessarily the reason for its lagging sales and heavy incentive spending. Rather it’s the result of the continued degradation of the Cadillac brand in the eyes of the consumer over the past few decades. I’m far from the only person that believes the ATS to be a superior product to the Mercedes-Benz C-Class, and there are plenty of knowledgeable  respected auto critics who feel that is is just as dynamically competent as the BMW 3-Series. But these two products are crushing the ATS in the sales race, undoubtedly on the strength of their respective brands. The unfortunate relaity is that most consumers don’t care about whether or not their car is The Ultimate Driving Machine; they just want a fancy badge to show off to other people. Until Cadillac’s brand is on par with the Roundel or the Three Pointed Star, this scenario of significant incentive spending and lagging sales will likely continue to play out, no matter how good the product is.


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Whoa! Where Did All The Pickups Go? Thu, 03 Jan 2013 19:39:07 +0000

The General attracted all kinds of flak for its growing inventory of full size trucks. When we raised the issue earlier in the year, we were chided for yellow journalism and blatant bias. Months later, the MSM woke up to the story, and when the Detroit News wrote that GM’s pickup truck inventory was “much higher than the less-than-100-day supply considered ideal for full-size pickups,” even the diehards accepted that the inventory may be a mite rich.

That problem just went away. Poof, gone, just like that.

Were GM’s dealers sitting on a mountain of full size pickups in November, enough supply to last for 139 days, a month later that inventory of BOFs suddenly is as lean as Heidi Klum on hunger strike. The year ends with GM’s plus-sized truck inventory sporting an ideal HWP. If GM’s stats are to be believed, then dealers just ripped through two months of supply, reducing the inventory from 139 days to a measly 80. GM’s truck inventory is right on target. All is good.

Did those trucks just fly off the lots, powered by incentives, easy money, and a rebounding economy? Well, they did. And herein lies the problem. The 80 days of inventory assume that the torrid pace of December continues well into the new year.

Let’s visualize the matter. Total inventory of GM pick-ups was up a little in at the end of November, and down a little at the end of December. Nothing dramatic. The drama starts when it is projected how many days that inventory represents.

Mathematically challenged may see nothing wrong in this graph. Someone who internalized the rule of three could rebel. How come 221,649 units are good for 80 days in December if a month earlier 245,853 units represented 139 days?

Full-size Pickups, Days Of Supply
Month Inventory Days Supply Sales/Day
October 235,585 110 2142
November 245,853 139 1769
December 221,649 80 2771

Driven by generous discounts, and some year-end tax buying, GM pickup sales jumped from some 44,000 in November to over 72,000 in December. Should the December sales pace continue into the new year, then the 80 days would be correct. Should the sales pace fall back to November levels, then the full-size truck inventory would reflect 125 days.  Which is more like the good old General we know.

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The Incentive Wars: GM Mounts All-Out Assault Tue, 18 Dec 2012 14:58:14 +0000

It did not take a high degree of intellect when we recommended last week to wait for a better deal if you are in the market for a Chevy or GMC pick-up.  GM threw its vaunted  fiscal discipline in the wind and is piling cash on the hood  of trucks that are piling up on dealer lots.

GM, says the Freep, is

matching or beating discounts from rivals Ford and Chrysler, offering up to $9,000 off remaining 2012 models and close to $4,500 off 2013s. That, plus low interest rates, sweet lease deals and abundant financing, is good news for people in the market for a truck.”

We never put much credence in the story that truck armadas must be kept in reserve such as not to run out of them when GM switches over to its 2014 models.

At the end of November, Chevy dealers had more than 169,000 Silverados nationwide,138 days of supply. Ford had a 90-day supply of F-150s, and Chrysler had 106 days’ worth of Rams.


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The Incentive Wars: GM Cries Uncle. Let Them Cry A Little Louder Tue, 11 Dec 2012 15:05:49 +0000 Last week, we told you to not buy a full-sized GM pickup just yet, and to hold out for big discounts from GM. You did not have to wait long. However, you may want to wait a little more.

The company that swore discipline and to protect profits now offers incentives as high as

$5,000 per pickup, Bloomberg reports.

This is probably just the opening volley in an all-out incentive war.

There are rebates worth $8,200 for Dodge Rams. TrueCar figures that Ford lubricates its pick-up deal with $6,500 on average. Nissan advertises rebates worth $7,450 for its Titan pickup.

Last Friday, GM doubled cash incentives and sweetening lease terms on some vehicles, including Chevrolet Silverado and GMC Sierra pickup trucks.

By end of November, GM was looking at pickup inventories of 245,853 units. That’s 4½ months of sales of Chevrolet Silverados and nearly five months of sales of its GMC Sierra.

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Battle Of The BOFs: All-Out War For Full-Size Trucks Impending Tue, 04 Dec 2012 10:06:52 +0000

Are you in the market for a full-size pickup? Hold your fire. With a little patience, you can profiteer from an all-out Battle of the BOFs. It’s a fight for your money, and for delivering optimistic 2012 sales goals. The noise you hear outside are the winds of war:  GM not only missed its truck sales goals in November, it also sits atop a 4 ½ month supply of full-size pickups taking up space (and cash) at dealer lots.  ”We’ll continue to use all levers to influence inventory…,” said Kurt McNeil, GM’s VP of U.S. sales. “That includes first and foremost adjusting production and marketing activity.” Translation: Shutdowns and cash on the hood.

GM’s pickup truck inventory is “much higher than the less-than-100-day supply considered ideal for full-size pickups,” says the Detroit News, a publication untainted by suspicion of anti-GM bias. We have been saying this for months, but who’s listening to us? Well, nadude does. Even the DetN is growing dubious of the canard that the trucks are piled high to compensate for downtime at plants that transition to new 2014 Chevy Silverados and GMC Sierras. The DetN thinks that GM will have to offer bigger incentives to move the metal, and that the lieutenants at the General are “looking at possible production cuts.”

The first skirmishes were fought in November. After an artillery barrage of what GM called “unexpectedly high” incentives on 2012 pickups by Chrysler and Ford, Ram pickup sales exploded by 23 percent last month, Ford’s F-series wooshed 17.9 percent higher. GM did not return fire. Result: GM’s total truck sales lost 11 percent, full-size truck sales were down 8 percent.

“I imagine GM will be very aggressive spenders in December to end the year on a high note,” said Jessica  Caldwell of Edmunds.

Agreed. And since the other guys are no dummies, TTAC expects a happy exchange of counter-battery fire. Not of the electric kind.

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As Car Sales Go Up, Deals Go Away Tue, 02 Oct 2012 13:55:08 +0000

Sales won’t be the only thing up when September new car sales are reported today. (Keep an eye on TTAC.) “”Transaction prices in September are the highest in years,” said Jesse Toprak, research chief of  

September Transaction Prices
Manufacturer Sept’12 Aug’12 Sept’11 YoY MoM
Chrysler (Chrysler, Dodge, Jeep, Ram, Fiat) $29,577 $29,596 $28,873 2.40% -0.10%
Ford (Ford, Lincoln) $32,048 $32,196 $31,793 0.80% -0.50%
GM (Buick, Cadillac, Chevrolet, GMC) $32,274 $32,391 $32,512 -0.70% -0.40%
Honda (Acura, Honda) $26,760 $26,767 $26,551 0.80% 0.00%
Hyundai/Kia $22,345 $22,378 $21,122 5.80% -0.10%
Nissan (Nissan, Infiniti) $27,564 $27,708 $27,155 1.50% -0.50%
Toyota (Lexus, Scion, Toyota) $27,701 $27,845 $27,183 1.90% -0.50%
Volkswagen (Audi, Volkswagen) $33,024 $33,207 $32,812 0.60% -0.60%
Industry $30,282 $30,274 $30,018 0.90% 0.00%
 Data courtesy

Transaction prices are going up because incentives are going down. On average, manufacturers put $2,468 on the hood of each car, down 6.7 percent from the $2,645 offered in September 2011. Most generous: Chrysler Group ($3,256) and GM ($3,008). Stingiest: Hyundai ($1,294) and Toyota ($1,930).

If you want deals, look for 2012 model year vehicles. Says Jessica Caldwell of Edmunds:

“This is the time of the year when inventories really start to see dramatic shifts in the proportion of vehicles from the upcoming model year. As demand builds for the new hot designs, car dealers don’t have to offer as much of a discount to move those vehicles off their lots. That’s why we recommend that car shoppers give extra consideration to some of the great deals on outgoing 2012 model year vehicles.”

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$10,000 Off a Volt, Haters Gonna Hate? Mon, 24 Sep 2012 17:37:09 +0000


The latest from USA Today suggests now is a good time to buy a Chevy Volt, if that’s what you really want.  I checked in with former(?) TTAC scribe Captain Mike Solo, currently helping someone lease a Volt, and he says about the same: lease for $270 a month, with $1500 down.  Which includes the government tax credit built into the residual…probably. So what does this all mean?

So far this year, the Volt’s outsold half the cars currently on sale.  And while a $40,000 Chevy (that isn’t a Vette or a truck) is a hard sell, cash on the hood gets everyone hot and bothered. Especially truck buyers, regularly seeing discounts of $10,000 or more. Sales rise, then fall.  A dealership’s floorplan falls, then rises once again.  Automakers calm down, then heat things up. And now we know that it’s no different with the Volt. Surprised?

Unless you have Ferrari’s rabid customer loyalty, this is just the game in action. No matter the Volt’s cutting edge technology, no matter what was sold to us in Washington by people no longer in play, it all comes down to the Money, Honey.  And this incentive cycle is just business as usual, so you can decide if the Volt is a success…or a flop.

Off to you, Best and Brightest.

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Incentives Stable In August, But Automakers Are Getting Good At Hiding Them Fri, 31 Aug 2012 18:24:20 +0000


People keep their eyes on automaker incentives for various reasons. Customers are hunting deals. Analysts hunt carmakers that are sitting on a glut of cars. Incentive numbers don’t always tell the full story, says Edmunds. In August, incentive spend was subdued and stable. Automakers and dealers have become adept in camouflage though, and the reported stability of incentive spending doesn’t factor in some of the “hidden incentives.”

Says Edmunds Vice Chairman Jeremy Anwyl:

“Automakers and dealers have been very creative this summer with how they’re packaging their deals and boosting sales numbers, whether through controversial stair-step incentive programs or by working with lenders to expand credit. Many of these programs are essentially impossible to quantify, but their cost to the manufacturers is real.”

BMW made headlines it did not want to make with a special offer to dealers on the last day of July. The Wall Street Journal reported that dealers received discounts of as much as $7,000 per 2012-model car, as long as each vehicle was reported as sold on that day only. The cars could then be offered to retail buyers at strong discounts with dealers still turning a good profit.

Average True Cost of Incentives (TCI) by Car Manufacturer
Manufacturer August ’12 July ’12 August ’11 MoM YoY
Chrysler $2,761 $2,777 $2,909 -0.60% -5.10%
Ford $2,844 $2,763 $2,680 2.90% 6.10%
GM $3,147 $3,194 $3,096 -1.50% 1.60%
Honda $1,554 $1,224 $1,666 27.00% -6.70%
Nissan $2,623 $2,869 $2,457 -8.60% 6.80%
Toyota $1,676 $1,623 $2,206 3.30% -24.00%
Industry $2,274 $2,237 $2,385 1.70% -4.70%
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Call Your Broker: Edmunds Predicts Strong Quarter For Automakers Thu, 01 Mar 2012 17:43:13 +0000 If you are thinking of buying some stock of an automaker, now could be a good time.  Not because of the strong sales. Because of dropping incentives, paired with strong sales. This indicates a strong first quarter, which should drive up stock prices.

February’s incentives came in at the lowest of any February since 2003, says the’s True Cost of Incentives barometer. reports that the average TCI per vehicle in February was $2,193, up 2.4 percent over January (MoM,) but down 14.5 percent from February of last year (YoY.) Says Senior Analyst Jessica Caldwell:

“The decreased incentives spending across the industry so far in 2012 really underscores the healthy performance we’ve been seeing at dealerships nationwide. Car manufacturers know that consumers who deferred purchases in 2011 are still coming back to the market and by stepping back the discounts, they stand to pocket bigger profits. The first quarter of 2012 is shaping up quite well for automakers.”


Average True Cost of Incentives®
Manufacturer 12-Feb 12-Jan 11-Feb MoM YoY
Chrysler $2,426 $2,447 $3,191 -0.90% -24.00%
Ford $2,827 $2,788 $2,778 1.40% 1.80%
GM $3,257 $3,171 $3,845 2.70% -15.30%
Honda $1,080 $1,060 $1,504 1.90% -28.20%
Nissan $2,717 $2,417 $2,797 12.40% -2.90%
Toyota $1,431 $1,426 $2,112 0.40% -32.20%
Industry $2,193 $2,141 $2,566 2.40% -14.50%


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