American car dealers are gearing up for winter sales with generous incentives and discounts, aiming to clear out older vehicle stocks and capitalize on sustained consumer demand. For the past four years, automakers have offered minimal discounts during year-end sales, but this year is different. The average transaction price (ATP) for new vehicles in November 2023 fell by 1.5% compared to the previous year, signaling a shift in the market. Inventory levels are at their highest since early 2021, prompting automakers to make way for new models arriving in January.
Automakers have already started offering incentives and lowering transaction prices to attract buyers. New vehicle sales incentives were up by a staggering 136% year over year in November, indicating a shift towards a buyer’s market. Stellantis-owned Jeep, for example, had the highest inventory at the beginning of December and is now offering discounts on its Gladiator truck and Compass crossover.
This change in pricing and incentives comes after years of high vehicle prices, which led some customers to consider used options. Despite fewer units sold, automotive retailers and carmakers have enjoyed substantial profits. Now, the landscape seems to be shifting, creating opportunities for consumers to take advantage of discounts and incentives during the winter sales season……..[read more]
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What factors influence consumer decisions when buying new or used vehicles in this changing landscape of the automotive market? How might the availability of discounts and incentives impact a consumer’s choice, and what implications does this have for the business strategies of car dealers and automakers?
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