Saturday, June 7, 2008

Automakers bring back Purchase incentives following dip in market

With gas prices high, a weakening economy and slowing demand, automakers will need incentives to lift sluggish automobile sales, automaker Chrysler decided Friday.

"Incentives will be a key part but the focus will shift on those products that are facing the headwinds, such as trucks and SUVs, rather than those benefiting from the tailwind like cars." said Chrysler LLC President Jim Press, according to Dow Jones Newswire.

Incentives, which can help raise sales numbers, are not always an automakers ally as they cut into the profit margins of their dealers.

Some of the major automakers began to phase out the buying incentives early this year and offset any reduced sales with expense reductions, choosing to keep plants idle rather than produce an inventory build up. With May auto sales down across the board, automakers are quickly shifting their philosophy.





Employee price discounts have already been brought back by Ford for its F-series pickup trucks.

For the month of May, Chrysler had an average incentive per vehicle sold of $3,714, the highest among the major automakers.

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