Manufacturers Help Dealers Clean Out Their Lots
As the year-end approaches, manufacturers are doing their part to help dealers clear out excess inventory by significantly increasing incentives, with new-vehicle incentives up by over 60%.
WardsAuto’s Nancy Dunham says the surge in promotions includes cashback offers, low financing rates and discounts, making it an attractive time for consumers to purchase vehicles. These efforts aim to address high interest rates and help dealers hit year-end sales targets.
While the strategy has succeeded in moving older inventory, analysts caution that long-term reliance on heavy incentives could impact automaker profitability and pricing discipline.
“The average transaction price paid for a new vehicle in the U.S. in October was $48,623, according to Kelley Blue Book. Transaction prices in October were higher than the revised September price ($48,423) and higher by 1.7% from year-earlier levels ($47,826). For more than a year, new-vehicle prices in the U.S. have remained mostly unchanged at nearly $48,500, as higher inventories continue to keep downward pressure on the market,” Dunham writes.
