Tuesday, September 29, 2009

Buying a Car Gets Pricier as GM, Ford Cut Inventory

Sept. 29 (Bloomberg) -- Buyers who have been waiting for better deals on new cars may be disappointed.

General Motors Co. and Ford Motor Co., bucking decades of tradition, are weaning themselves from dependence on profit- sapping discounts after factory shutdowns curbed dealers’ supply of cars and trucks.

Incentives on GM, Ford and Chrysler Group LLC autos plunged 26 percent to $3,278 in August from a March peak, while discounts industrywide fell 22 percent to $2,474, according to researcher Edmunds.com. The U.S. automakers’ vehicles sold for an average of $2,000 more in the second quarter than a year earlier, said researcher J.D. Power and Associates.

“As we suffered through the worst automotive recession in our lifetimes, the lesson automakers learned was to stay under control and not bloat inventory, which you have to follow with huge incentives to move the metal,” said Jeff Schuster, an analyst at J.D. Power. “From now on, we’re going to see a more cautious approach to incentives.”

Posted by : Stephen Barile

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