Report: Automakers reduce incentives in April to 5-year low

2011 Chevrolet Cruze

As the pace of car sales have ramped up and consumer confidence improved in April – a majority of automakers are becoming less enticed to kick-back rebates and incentives for U.S. consumers. According to a majority of automakers the incentives and discounts for U.S. consumers have decreased to a five year low of $2,320 per vehicle.

According to Jesse Toprak, vice president of industry trends at “The outlook for incentives is that they are going to be down dramatically” Analysts from JPMorgan Chase & Company and Citigroup are also suggesting that the higher prices is contributed to a lower production output from Japan that was caused by the March 11 Earthquake.

So which companies are throwing down less incentive kick back?

GM will not offer any cash rebates on any 2011 Cadillac vehicle. Ford and Chrysler brands have also reduced their incentives between 20 – 23 percent. With the many cost-busting deals shrinking, there still incentives coming down from Japan-based manufactures. Honda Motor Co., has boosted incentives by 8.7 percent to $2,170 in April. Toyota has slightly reduced incentive spending by 3.1 percent but, is still offering strong cash rebates and outstanding finance deals for their popular Camry and Tundra models.

– By: Stan Brand

Source: Bloomberg