As Rivals Rein in Spiffs, Toyota Goes to the Whip

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Washington DC May 10, 2010; The AIADA newsletter reported that according to Automotive News, Toyota Motor Sales U.S.A. outperformed the U.S. market in April and matched the robust sales gains posted by Ford Motor Co., Hyundai-Kia and Chrysler.

But Toyota did it by piling on incentives, while the other three groups – and most of the rest of the industry – are doing the opposite.

High-flying Hyundai-Kia grew at the same rate as Toyota last month despite slashing incentives in half compared with a year ago.

In April, Toyota put an average of $706 more on the hood than Hyundai, according to Edmunds.com. All four automakers outpaced the overall market's 20 percent gain, finishing in a narrow range between Hyundai-Kia's 24.3 percent and Ford's 24.9 percent increases. But how they got there varied widely.

When its sales faltered in January and February, Toyota boosted incentives to company-record levels of $2,743 in March. It backed off a bit in April – but the $2,498 per vehicle was still $864, or 53 percent, higher than in April 2009. Hyundai-Kia cut incentive spending from $3,427 in April 2009 to $1,792 last month. Thus, while Toyota's spiffs are up by half from last April, Hyundai's are down by about half.