Toyota Motor Sales U.S.A. outperformed the U.S. market in April and matched the robust sales gains posted by Ford Motor Co., Hyundai-Kia and Chrysler. But Toyota did it by piling on incentives, while the other three groups -- and most of the rest of the industry -- are doing the opposite.
High-flying Hyundai-Kia grew at the same rate as Toyota last month despite slashing incentives in half compared with a year ago. In April, Toyota put an average of $706 more on the hood than Hyundai, according to Edmunds.com.
All four automakers outpaced the overall market's 20 percent gain, finishing in a narrow range between Hyundai-Kia's 24.3 percent and Ford's 24.9 percent increases. But how they got there varied widely.
-- Ford's incentives were down $404 from last April. CEO Alan Mulally has focused on building only enough vehicles to meet demand, and it's paying off. For five straight months, Ford has achieved at least a 20 percent year-over-year sales increase.
The company's market share has gone from 16.3 percent in April 2009 to 17.0 percent last month, and its transaction prices and resale values are climbing.
Ford's average incentive is still almost $1,000 higher than Toyota's, but sales boss Ken Czubay said that's because Ford's mix includes more big trucks that require the highest offers.
"If you look at [incentives] vehicle against vehicle, we're very closely aligned with our Asian competitors," Czubay said.
-- Hunkered-down Chrysler recorded its best sales month since July 2005 in terms of year-on-year percentage increase. Of course, outselling the month in 2009 when it declared bankruptcy is a hollow victory. But Chrysler spent $1,009 less on incentives than a year ago as it pursues CEO Sergio Marchionne's strategy of conserving cash until new products start to flow out of its partnership with Fiat Group next year.
-- Toyota is scrambling to restore consumer confidence after multiple safety recalls, congressional hearings, and fines and investigations by federal safety officials.
When its sales faltered in January and February, Toyota boosted incentives to company-record levels of $2,743 in March. It backed off a bit in April -- but the $2,498 per vehicle was still $864, or 53 percent, higher than in April 2009.
Toyota remains below the industry average of $2,654, but it's no longer among the low-incentive companies.
Last week Toyota extended its cut-rate lease deals and 0 percent financing on its most popular models into May, and Lexus added new lease deals. The Toyota brand will keep pushing leasing deals, division chief Bob Carter said.
-- Hyundai-Kia cut incentive spending from $3,427 in April 2009 to $1,792 last month. Thus, while Toyota's spiffs are up by half from last April, Hyundai's are down by about half.
Among other major players, Nissan North America was tops with a 35 percent sales improvement, while American Honda Motor Co. was up 13 percent and General Motors Co. rose 7 percent.
Automakers sold 982,302 light vehicles in April, a seasonally adjusted annualized selling rate of 11.5 million. That's down from a SAAR of 11.7 million in March but higher than 10.5 million in January and 10.4 million in February.