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Spiff wars heat up, with Toyota cranking up incentives the most

It's official. The post-quake product shortage is over. That tight-supply, low-incentives lull since Japan's March 11 earthquake/tsunami whacked production? Forget it. The U.S. auto marketing wars are back.

How do we know? Toyota group and American Honda are boosting incentives, a sign they have restocked enough to compete -- and are going after the 6 points of market share they lost between May and August.

Toyota group boosted September incentives 17 percent from a year ago to $2,472 per vehicle, and Honda sweetened the pot 7 percent to $2,370, TrueCar.com said. Over the same period, Hyundai-Kia, Ford and Chrysler cut their spiffs 7 to 19 percent and increases at General Motors and Nissan were less than 1 percent.

Those are the raw numbers. What's more interesting is TrueCar's calculation of incentives as a percentage of transaction prices, which eliminates the skew from the Detroit 3 selling more expensive vehicles, especially those largely workhorse pickups.

The September market dispels the perception of incentives as a Detroit-only game. If the rap was that Detroit automakers discounted the most because they had to and Japan discounted the least because their products and reputations were better, it's time to reassess -- both momentum and percentage of discounting.

Look at the swing in just a year.

In September 2010, Toyota discounted 8.4 percent and Honda 8.9 percent, the least among the Big 7, although by lesser margins than in the 2000s. Chrysler was the highest, at a 12.8 percent discount, with Nissan at 10.8 percent. Ford, General Motors and Hyundai-Kia were clustered in the middle at just below 10 percent.

But last month, the two lowest discounters were Hyundai-Kia at 7.7 percent and Ford (8.8 percent). Chrysler and Nissan are still the highest discounters. But now the middle three are Honda, Toyota and GM, all slightly higher than the industry average discount of 9.2 percent.

And check out the shift in momentum. In 12 months, discount percentages fell 2.0 points at Hyundai-Kia, 1.0 point at Ford, 0.9 points at Chrysler and a tenth of a point at Nissan.

Who increased discounts? Toyota sweetened the pot by 1.3 percentage points and Honda by 0.4 percentage points. And sales fell at both automakers. GM did boost September spiffs 0.2 of a point, but its sales jumped 20 percent.

True, Toyota and Honda are going to have to play catch-up on discounting for a bit while they chase after the market share they lost after the quake disrupted their production and U.S. dealer inventory.

But the old patterns of discounting among major automakers -- Japanese brands the least and Detroit and Korean brands the most -- have a new order.

These days, Hyundai-Kia and Ford are discounting the least and the rest of the Big 7 are discounting more than the industry average.

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