JIM HENRY

Have we seen the end of fire sales?

Jim Henry is a special correspondent for Automotive News
This could be one of the best pieces of news to come out of 2010.

Incentives seem to be starting to work the way they're supposed to: for instance, as a tactic to combat the lost sales that followed Toyota's giant recalls or as a way to move 2010 models to make room for the 2011s.

That's better than the nightmare scenarios of the mid- to late-2000s, when consumers were so used to big incentives that the offers lost their effectiveness. George Pipas, Ford's U.S. sales analysis manager, said yesterday that the seasonally adjusted annual sales rate for December was about 1 million units higher than Ford had expected, even though incentives were not especially high.

That cuts both ways for finance managers. Maybe they'll miss the sales benefits of "everyday low prices," but on the other hand, a genuinely special offer really will move the metal.

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