Incentives Push Up July Auto Sales

Thanks largely to the auto industry’s biggest-ever use of discounting, July was the strongest month for auto sales this year. An adjusted annual rate of 17.3 million cars were sold, the top end of analysts’ estimates.

Consider the July Fourth weekend: The typical new-car price between July 1-6 was nearly 20 percent lower than sticker cost after manufacturer incentives and dealer discounts, according to CNW Marketing Research in Bandon, Ore. Manufacturer incentives amounted to $3,946 a unit, but dealers added another $1,415, giving buyers a hefty $5,361 incentive per car and light truck.

Compared with July 1-7 last year, the average manufacturer-suggested retail price was up 2.9 percent, but the transaction price—what consumers actually paid—was down an average of 1.4 percent. Total manufacturer and dealer discounting jumped 24.8 percent.

“Consumers are wanting bigger and bigger discounts. This is the highest we’ve ever seen,” said CNW president Art Spinella, whose firm has tracked transaction prices since 1989. Spinella says manufacturer incentives could hit $4,300 per vehicle this year.

With incentive offers, car makers tend to shift image advertising dollars out of magazines and into more tactical executions in television and newspapers. —NO’L