Emerging Debate: Incentives and Discounting Too High? | Auto Finance News | Auto Finance News

Emerging Debate: Incentives and Discounting Too High?

CarnivalBlockbuster yearend sales were “more push versus  pull,” said Mike Jackson, chairman of the nation’s largest auto retailer, AutoNation Inc. Jackson warned investors in a note last week that AutoNation expects “significant margin declines” for the fourth quarter. He said the group would take “necessary steps” in 2016 “to align our costs, inventory, and pricing strategy.”

In separate conference calls, OEM executives said that loan and lease incentives played a typical but not “extraordinary” role in high yearend sales.

“The strength of the industry, the strength of the Ford brand performance, was not what I would call incentive-driven, driven by an extraordinary level of incentives,” said Mark LaNeve, Ford Motor Co. vice president for U.S. marketing, sales, and service.

Despite 0% finance offers in December, Ford incentives were lower in the fourth quarter than in the third quarter, he said. In an earlier Securities and Exchange Commission filing, Ford Motor Credit said subvened APRs accounted for 49% of its loan originations through September 2015, versus 47% in the year-ago period.

Meanwhile, Bill Fay, Toyota Division group vice president and general manager, said “Toyotathon” yearend incentives were the high point for Toyota incentives in 2015, but still “very much below industry average.”

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