Question: What do Nissan, Hyundai, Suzuki, Kia, Mazda, and Mitsubishi have in common?
Answer: Each seems to be offering at least one 0% auto lending deal in October.
Is this the return of the 0% loan?
Zero percent financing came into the car-buying lexicon after 9/11, and boy did it provide a shot in the arm to the US auto industry. But 0% melted away amid the roar of the credit crisis. Now capital costs have modulated to such a degree — credit spreads on Wall Street are nearing “normal” levels — that bringing a 0% 
financing deal to market won’t erode a manufacturer’s profit margin. Whether we’ll see a wholesale return to the marketing ploy is another question entirely.
It should be noted that subvention ratcheted up last month after five months of declining incentives for consumers, according to Edmunds.com. The average automotive manufacturer incentive in the U.S. climbed 3.4% last month to $2,557 per vehicle sold. The market is heating up.
The takeaway from all this is that the automotive sector seems to be returning to familiar place: severe price competition and price-driven marketing. Is that a good thing? Depends how you look at it. Assuming price competition accelerates (not a sure thing), the key will be whether manufacturers maintain their margin discipline, something they did not do in the mid 2000s. That said, it’s good to see that competitive spirit alive in the market. It certainly beats the bankruptcy bell sounding in the auto industry just a few months ago.
