Top Asian Automakers Spent Big on Incentives in December, Sparking Heavy Sales

DETROIT January 7, 2005; John Porretto writinfg for the AP reported that the top Japanese automakers strongly resembled their Big Three rivals in incentive spending last month, pouring on rebates and financing offers and sparking heavy sales in the process.

Meanwhile, only General Motors Corp. spent more on incentives in December versus November among the Big Three. On a year-over-year basis, GM, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group all spent less last month than during December 2003.

But Detroit automakers still spend far more on average than their Asian and European competitors.

"After remaining on the sidelines for most of 2004 on a relative basis, (Japan's Big Three) joined the game in December," Merrill Lynch analyst John Casesa said in a report Thursday. "The rise in incentives drove impressive sales and market-share gains largely at the expense of the Detroit Three."

Nissan Motor Co. spent an average of $2,099 per vehicle on incentives last month, 2.7 percent higher than November, according to Autodata Corp. Its monthly business rose 32.7 percent from a year ago.

Honda Motor Co.'s average outlay was $973 -- 24.3 percent higher than November -- and its sales climbed 30 percent. Toyota Motor Corp. spent an average of $960 on incentives in December -- up 28.5 percent from November -- and its sales climbed 18 percent.

The industry average in December was $2,705.

Sales of new cars and trucks rose 3.7 percent in December from a robust month a year ago. But GM and Ford weren't able to cash in, as their sales fell 6.8 percent and 3.6 percent, respectively. Chrysler continued its impressive performance, posting a 5 percent increase in business -- the 14th time in 15 months for a year-over-year sales increase.

GM's $3,830 average incentives outlay last month was up 2 percent from November. Ford's $2,981 average was down 7 percent from November, and Chrysler's $3,497 was off 1.4 percent.

For the year, GM's incentive spending rose 12.6 percent, Ford 9.7 percent and Chrysler 13.3 percent, according to Autodata. Among the Asians, Honda's average outlay grew 54.7 percent in 2004, while Nissan's grew 36.1 percent. Toyota curtailed its average incentive spending by 4.9 percent.