GM Leading Discount Spending in the US

Incentives have always been a big part of how carmakers do business in the US, as a substantial consumer market makes competition between companies greater than on other markets. It appears that discount spending has once again risen in February, as the largest automakers, Toyota Motor Corp. and General Motors Co. offered ever better prices to get existing models off their lots. However, an all-out cost-cutting war between the two companies is still unlikely, according to a Detroit News Report.

According to some industry insiders, the car market is in recovery, so there is no need for big deals to be offered. "With the economy expanding and inventory in a relatively good position, it minimizes the risk of a price war," said George Pipas, sales analyst at Dearborn-based Ford Motor Co., which promises to keep incentives in check.

Despite the fact that it lead the field in both January and February, General Motors has repeatedly stated that it is taking a much more selective approach to offering deals than the blanket discounts the old GM was known for. The company has also stated that it will fall back to the regular industry levels this month.

The Detroit giant’s programs have always been controversial. After the 9/11 terrorist attacks, for instance, it was credited with helping the US economy recover after zero-percent financing was offered. But this also forced other carmakers to follow, resulting in a big financial mess for Chrysler.

"There is no price war," declared Chrysler spokesman Ralph Kisiel. "Our incentive spending has been going down." So at least we know the situation is unlikely to change much in the near future.