After a month in which auto sales were goosed by high incentives launched by Toyota, some automakers are downplaying the prospect of a full-out incentive war.
It's more like a skirmish, they say.
Ford, expecting another strong month, says it will stay on plan and try to maintain pricing discipline. And Honda says its atypically large lease and financing incentives aren't such a big deal.
The new incentives won't be sustained, said Edmunds.com CEO Jeremy Anwyl.
"Incentives drove sales this month, but those were defensive moves in response to Toyota," Anwyl said. "They are unlikely to last because inventories are simply not high enough to justify them in the long term."
But the spiffs appear to be working. Last week Edmunds.com Inc. forecast 1.12 million light-vehicle sales in March, up 31 percent from a year ago. That would be a seasonally adjusted annualized selling rate of 12.4 million, up sharply from February's 10.4 million.
Earlier, J.D. Power and Associates had forecast a March SAAR of 12.1 million. That was based on the first 11 days of sales -- after General Motors and Ford had countered Toyota's aggressive incentive initiative but before Honda joined the fray March 15.
Honda, which professes a philosophical opposition to high incentives, is offering no money down and no security deposit on all car and truck leases and 0.9 and 1.9 percent financing on select vehicles. Honda's "The Really Big Thing Sales Event" runs through May 3, beyond the April 5 expiration of Toyota's 0 percent/60-month financing and subsidized lease program.
"March incentives are higher than in February, but not as high as the record pace of March 2009," said Jessica Caldwell, senior analyst for Edmunds.com.
March 2009 was the high-water mark for U.S. incentives: an average of $3,165 per vehicle, Edmunds.com says. That's when automakers struggled to unload bulging inventories at the low point of the current slump.
To be sure, while Honda's and Toyota's incentives have drawn closer to the industry average, the Detroit 3 still spend more.
But the gap has narrowed. For example, in March 2009, Toyota spent $1,565 per vehicle, compared with $3,673 for Ford, a difference of $2,108, Edmunds.com said. But this month, Toyota is spending $2,242 and Ford $3,301, half the difference of last year.
Edmunds.com estimates per-unit incentives this month will be $2,717, up from $2,642 in February. The consulting firm TrueCar Inc. has different figures: $2,800 this month and $3,100 in March 2009. Both companies include cash rebates, subsidized financing and leases, and dealer cash.
George Pipas, chief sales analyst for Ford, downplayed chances that a new incentives war would end the pricing discipline automakers have shown since the cash-for-clunkers sales spike last summer cut U.S. inventories to manageable levels.
"This is a ballet that we had to perform all last year," Pipas said. "In 2009 we had two big companies go bankrupt and liquidations of brands and dealers. That's what we had to wade through, and we have these skirmishes sometimes."
He said Ford would continue to control production and inventory closely and limit the need for incentives by introducing new products this year. Edmunds.com estimates Ford's March incentive spending at $3,301, up only $13 from February and down $372 from last March.