Incentives Not Limited to Big Three
Despite high quality ratings and resale values, foreign automakers such as and can't ignore the deal-driven U.S. car market and are quietly racheting up their own incentives, The Detroit News reported.
Although Detroit's traditional Big Three are still kings of the discount, Asian and European makers are "employing a subtle strategy of relying more on cut-rate financing and dealer bonuses," the story said.
While General Motors, Ford and Chrysler offer numerous combinations of discounts, dealer incentives, cash-back offers and low-rate financing (that can reach the $3,000- range) to get potential buyers in the showroom, Toyota, Nissan and others are also using special deals to close the sale.
Over the past year, Toyota has more than doubled rebates on its passenger cars to an average of just over $1,100 per vehicle, according to New Jersey-based research firm Autodata Corp. Nissan's passenger car incentives averaged more than $2,000 and even premium German makes such as Audi and Mercedes-Benz averaged more than $1,400 in incentives per vehicle, Autodata said.
Honda is the least generous foreign automaker, with incentives averaging just $582 per vehicle in January, said Autodata, less than one-fifth the incentives on Chrysler-brand vehicles.
Even the smaller Japanese automakers are under pressure to match Detroit on incentives — Mitsubishi ramped up rebates and low-cost financing to average more than $2,711 through 2003, for example.
Saturn Seeks Salvation With New Sports Car
Saturn, General Motors' struggling small-car division, will build a small sporty car based on GM's roadster platform, The Detroit News reported.
The new, as yet unnamed, will go into production in late 2005, arriving in showrooms in early 2006, the story said.
"The future sports car will serve as a halo vehicle for Saturn," Bob Lutz, GM vice chairman for product development, said in a statement. "This is a game-changer for Saturn."
The new car is part of an effort by GM to rebuild Saturn, which was created in 1985 to compete with foreign imports but has been struggling for years.
To stop its sales slide, Saturn is introducing three new products in the next 36 months, including the Relay crossover sport van this fall, the story said.
Both the Solstice and the Saturn version will be produced in low volumes — fewer than 50,000 units annually, combined.
Chrysler Mulls More Mitsubishi Projects
Chrysler is looking to team up with Mitsubishi, the Japanese company partly owned by parent DaimlerChrysler, in developing new vehicle models, the Associated Press reported, citing Chrysler division boss Dieter Zetsche.
already cooperates with on building a pickup that's due next year and the two have also joined on engine development and other projects.
Mitsubishi's pickup will share technology with the , but the automakers claim that each model will have a distinct design, the story said.
Without being specific, Zetsche said the two companies were exploring other cooperative efforts. "I do believe there are more opportunities we haven't leveraged, and we'll try to find those," Zetsche told the AP in an interview at the Geneva International Motor Show. "If there's a chance, we'll go for it."
DaimlerChrysler owns 37 percent of Mitsubishi, which lost more than $600 million for the fiscal year ending March 31, and is sending a team to Tokyo to help devise a rescue plan for the struggling company.
Hummer on a Bummer
Sales for the sport utility vehicle have cooled in recent months, Reuters reported, forcing General Motors to offer dealers incentives to help move sales.
Sales for the H2 fell 21 percent in February, the sixth straight month of a year-over-year drop in results for the once-hot model, the story said. And, inventories of unsold H2s are running at a 52-day supply, more than twice as high as the rate a year ago, although that's still a healthy rate compared to the overall industry.
To boost interest, GM offered 48-month leases on the SUV last month with no down payment, no first month's payment and nothing due at the signing.
The Indiana plant that makes the H2 has annual capacity for 40,000 vehicles, but even if sales continue to drop this year, "we can go significantly below 30,000 and still make a profit," Hummer spokesman Pete Ternes told Reuters.
Nissan Recalls Quest Minivan
Nissan says it is recalling 13,757 2004 because the passenger air bag could deflate when there's a child in the front seat, the Associated Press reported, citing a company spokesman.
Nissan says it discovered the potential problem during vehicle testing when it found that the air bags could deploy when a dummy the size of a 6-year-old was in the front passenger seat, Nissan spokesman Eric Booth said.
Federal standards require many new vehicles to have advanced air bag systems, which detect the weight of a passenger and go off if the passenger is too small to withstand the force.
Nissan will begin notifying customers about the recall in May, Booth said. Dealers will recalibrate the system in affected vehicles.