Deals on wheels to keep rolling in U.S. car market

DETROIT, Dec. 3 (Reuters) - The end of the year will most probably not mean an end to big deals on new U.S. cars and trucks, a leading auto industry analyst said on Wednesday.

Art Spinella, head of Bandon, Oregon-based CNW Marketing Research, told Reuters that shoppers have no reason to worry about an early end to the sort of blowout deals that U.S. automakers began offering after the Sept. 11, 2001, attacks.

Consumers consistently demand $3,800 to $3,900 in discounts off the sticker price of any new vehicle they buy.

"That's what consumers expect the discount to be," Spinella said of his nationwide research of the auto retail market in a phone interview. "They don't care where it comes from. They simply go somewhere else if it's less than that."

General Motors Corp. has been saying ever since the third quarter of this year that it was backpedaling a bit on consumer incentives as an improving job market allowed for less generous discounts on new cars and trucks.

The world's largest automaker did it again on Tuesday, saying it was trimming some of its U.S. sales incentives by raising the finance rates on mid-size sport utility vehicles and cutting cash rebates on some small cars.

Spinella said GM, Ford Motor Co. and the Chrysler unit of DaimlerChrysler had in fact been trying to selectively ease off discounts lately.

But he said Detroit automakers were simply shifting some of the profit-eroding discounts onto the backs of their dealers rather than shouldering the costs themselves.

"The total amount of dollars that are being discounted isn't changing. It's a case of the total discount; how much of it from the manufacturer and how much of it is dealer profit that's being given back to the customer, and that's really the shift," Spinella said.

"You're probably going to wind up seeing that same level, that $4,000 to $3,500 per unit level of discount from sticker going through all of next year," said Spinella, referring to the average incentive on Big Three vehicles over much of the last year.

"The difference is that instead of the manufacturer picking up $3,500 of it, manufacturers are probably going to wind up picking up a high $2,000 of it. The dealers are going to pick up the rest," he said.

The cost-shifting should help bolster the bottom line of Detroit automakers. But Spinella conceded that it made little difference in terms of the big picture despite hopeful talk among some auto industry officials about a pullback on incentives as economic growth accelerates.

"As an overall industry it's about a wash. The consumer is still getting the four grand ($4,000) no matter what. You just have to look for it in a different place, that's all."