The 2001 model year is well under way, and the key word in the auto sales world continues to be 'incentives.'
The manufacturers wish they would go away. The only people who are happy with them are the customers. Their motto is, 'No incentive, no sale.'
It wasn't supposed to be like this when Chrysler Corp. introduced rebates for buyers during its commercials at the 1975 Super Bowl. For weeks, radio listeners and TV viewers heard sportscaster Joe Garagiola chant, 'Buy a car, get a check.'
Other makers copied Chrysler, and soon the industry was involved in a rebate battle. But it wasn't going to last. It was a temporary measure designed to meet a high-inventory situation.
Sure, it was.
A quarter century later, rebates to buyers are still a way of life in the auto industry and are more entrenched than ever before. Will they go away? Probably not.
Henry Ford offered rebates to Model T buyers in 1912, but after that incentives were pretty much on the wholesale side. Dealers received cash for helping the factory move less popular models. Salespersons could win big-ticket prizes such as TVs, washers and refrigerators. Dealers and salespersons competed for vacations.
Then came Chrysler and the 1975 Super Bowl. The industry hasn't been the same since.
Buyer incentives are at a peak. Finance incentives are popular. The Chrysler group advertises that the buyer of a 2000 Chrysler LHS can save up to $5,965 in finance charges by selecting a 60-month, 0 percent contract.
The tables on this page show that General Motors, Ford Motor Co. and the Chrysler group are the biggest users of buyer incentives. Import brands participate but to a lesser degree. Do the imports know something about pricing and marketing that the Big 3 have not yet learned?