Like death and taxes, auto incentives are a fact a life. The sooner automakers realize that, the better off they will be.
Yes, you can argue that it makes no sense to build a $20,000 car, price it so the dealer and automaker make a decent profit - and then give thousands back to the consumer just to get the sale.
But like it or not, automakers have trained American consumers to look for incentives. And unless cars or trucks inherently command a premium, the makers must dig into their pockets to sell them.
General Motors has turned that cold reality to its advantage. GM took the lead with its 0 percent "Keep America Rolling" campaign last fall. Since then, the incentives have been reshaped into various effective forms. Now 0 percent is back to clear out 2002 models. GM seems to relish its role as industry pricing leader.
Now the Chrysler group has crafted a clear and simple message. As much as he wishes otherwise, Chrysler chief Dieter Zetsche has learned that high-volume Jeeps, Dodges and Chryslers can't command the same pay-the-sticker premiums as a Mercedes.
So Chrysler has taken a strength - declining warranty costs - and turned it into the foundation of the industry's longest transferable powertrain warranty. It's an incentive, pure and simple, even though it doesn't involve a rebate or a cut-rate loan. Other factors are at work in today's market. Leasing is one; pricing is another.
The bargaining power on pricing has swung to the manufacturers. Dealers once held some cards. They could use that huge gap between wholesale price and sticker price to dicker with consumers. That margin is now paper-thin. And those lovely rebates give the customers an edge they didn't have before.
It's a new climate - same players but different rules. Those who adjust can win. Those who can't adjust won't survive in the U.S. auto market.