Hyundai CEO says price war under way in U.S. auto market
Feeling the squeeze to perform well, automakers all over the US are being more aggressive than ever to move units, and some are even calling it a war.
“I think we can officially say that a price war broke out in the industry,” John Krafcik, CEO of Hyundai Motor America, said on the sidelines of the Chicago auto show. “There is apparently a lot of pressure to deliver sales results.”
The most recent round of price cuts came from GM, and they were quickly matched by Toyota this month. Krafcik has said that Hyundai has no current plans to follow suit, but will have to wait and see what develops in the industry. The main concern is that while the savings are great for customers and volume, they will ultimately cut into manufacturers profitability figures in our still-developing auto recovery.
Aggressive discounting is credited as having contributed heavily boom-bust cycles that destroyed resale values.
Hyundai’s average incentive spending was an average of $1,200 per vehicle, among the industry’s lowest, while GMs incentives are now over $3,000 per vehicle.
– By: Stephen Calogera
Source: Automotive News