A six-month truce in the industry's incentive wars is breaking down, and Toyota -- that paragon of marketing discipline -- is getting the blame.
Incentives hit a 20-month low in January after cash-for-clunkers slashed vehicle stocks last summer and sales began to perk up.
Now embattled Toyota is disturbing the peace. Its aggressive finance and leasing package has sparked a surge in marketing spending that could undo the industry's resolve to swear off costly spiffs.
"The domestics had weaned themselves off incentives," said John McEleney, president of McEleney Toyota in Clinton, Iowa.
"Now this is forcing them to respond."
Battling to lure back customers after its safety recall debacle, Toyota Motor Sales U.S.A. raised traditionally low incentives to record levels in February. Sales fell anyhow.
So on March 1 Toyota added 0 percent financing and subsidized leases. That bumped its spiffs another 25 percent, to about $2,500 per vehicle, Edmunds.com said.
General Motors countered with its own 0 percent financing. Ford soon followed suit.
"We'll be fully competitive for our dealers," said Ford Motor Co. sales boss Ken Czubay.
Sales surged. The incentives boosted the U.S. auto market in early March to the best sales pace this year, Edmunds.com said.